Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 26, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-38599 | |
Entity Registrant Name | Aquestive Therapeutics, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 30 Technology Drive | |
Entity Address, City or Town | Warren | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07059 | |
Entity Tax Identification Number | 82-3827296 | |
City Area Code | 908 | |
Local Phone Number | 941-1900 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | AQST | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 55,922,361 | |
Entity Central Index Key | 0001398733 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 26,882 | $ 27,273 |
Trade and other receivables, net | 7,551 | 4,704 |
Inventories, net | 6,981 | 5,780 |
Prepaid expenses and other current assets | 2,292 | 2,131 |
Total current assets | 43,706 | 39,888 |
Property and equipment, net | 3,814 | 4,085 |
Right-of-use assets, net | 5,884 | 5,211 |
Intangible assets, net | 1,396 | 1,435 |
Other non-current assets | 6,485 | 6,451 |
Total assets | 61,285 | 57,070 |
Current liabilities: | ||
Accounts payable | 12,440 | 9,946 |
Accrued expenses | 4,508 | 7,967 |
Lease liabilities, current | 328 | 255 |
Deferred revenue, current | 4,765 | 1,513 |
Liability related to the sale of future revenue, current | 1,147 | 1,147 |
Loans payable, current | 17,195 | 18,700 |
Total current liabilities | 40,383 | 39,528 |
Loans payable, net | 25,196 | 33,448 |
Liability related to the sale of future revenue, net | 64,137 | 64,112 |
Lease liabilities | 5,706 | 5,085 |
Deferred revenue | 33,039 | 31,417 |
Other non-current liabilities | 2,059 | 2,034 |
Total liabilities | 170,520 | 175,624 |
Contingencies (Note 19) | ||
Stockholders’ deficit: | ||
Common stock, $0.001 par value. Authorized 250,000,000 shares; 55,922,361 and 54,827,734 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 56 | 55 |
Additional paid-in capital | 193,848 | 192,598 |
Accumulated deficit | (303,139) | (311,207) |
Total stockholders’ deficit | (109,235) | (118,554) |
Total liabilities and stockholders’ deficit | $ 61,285 | $ 57,070 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Stockholders’ deficit: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 55,922,361 | 54,827,734 |
Common stock, shares outstanding (in shares) | 55,922,361 | 54,827,734 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenues | $ 11,134,000 | $ 12,270,000 |
Costs and expenses: | ||
Manufacture and supply | 4,737,000 | 4,214,000 |
Research and development | 3,547,000 | 4,773,000 |
Selling, general and administrative | 7,455,000 | 13,021,000 |
Total costs and expenses | 15,739,000 | 22,008,000 |
Loss from operations | (4,605,000) | (9,738,000) |
Other income/ (expenses): | ||
Interest expense | (1,435,000) | (1,618,000) |
Interest expense related to the sale of future revenue, net | (52,000) | (1,861,000) |
Interest and other income (expense), net | 14,513,000 | (3,000) |
Loss on extinguishment of debt | (353,000) | 0 |
Net income (loss) before income taxes | 8,068,000 | (13,220,000) |
Income taxes | 0 | 0 |
Net income (loss) | 8,068,000 | (13,220,000) |
Comprehensive income (loss) | $ 8,068,000 | $ (13,220,000) |
Earnings (loss) per share attributable to common stockholders - basic (in dollars per share) | $ 0.15 | $ (0.32) |
Earnings (loss) per share attributable to common stockholders - diluted (in dollars per share) | $ 0.11 | $ (0.32) |
Weighted average common shares outstanding - basic (in shares) | 55,631,947 | 41,465,798 |
Weighted average common shares outstanding - diluted (in shares) | 73,792,886 | 41,465,798 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Deficit - USD ($) $ in Thousands | Total | Public equity | Common Stock | Common Stock Public equity | Additional Paid-in Capital | Additional Paid-in Capital Public equity | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 41,228,736 | ||||||
Beginning balance at Dec. 31, 2021 | $ (82,134) | $ 41 | $ 174,621 | $ (256,796) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued (in shares) | 391,652 | ||||||
Common stock issued, value | $ 1,360 | $ 0 | $ 1,360 | ||||
Costs of common stock issued under public equity offering | (62) | (62) | |||||
Share-based compensation expense | 913 | 913 | |||||
Other | 0 | 1 | (1) | ||||
Net income (loss) | (13,220) | (13,220) | |||||
Ending balance (in shares) at Mar. 31, 2022 | 41,620,388 | ||||||
Ending balance at Mar. 31, 2022 | (93,143) | $ 41 | 176,833 | (270,017) | |||
Beginning balance (in shares) at Dec. 31, 2022 | 54,827,734 | ||||||
Beginning balance at Dec. 31, 2022 | (118,554) | $ 55 | 192,598 | (311,207) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued (in shares) | 1,078,622 | ||||||
Common stock issued, value | 993 | $ 1 | 992 | ||||
Costs of common stock issued under public equity offering | $ (77) | $ (77) | |||||
Share-based compensation expense | 344 | 344 | |||||
Vested restricted stock units (in shares) | 16,005 | ||||||
Vested restricted stock units | (8) | (8) | |||||
Other | (1) | (1) | |||||
Net income (loss) | 8,068 | 8,068 | |||||
Ending balance (in shares) at Mar. 31, 2023 | 55,922,361 | ||||||
Ending balance at Mar. 31, 2023 | $ (109,235) | $ 56 | $ 193,848 | $ (303,139) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating activities: | ||
Net income (loss) | $ 8,068 | $ (13,220) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation, amortization, and impairment | 325 | 727 |
Share-based compensation | 344 | 913 |
Amortization of debt issuance costs and discounts | 56 | 40 |
Interest expense related to the sale of future revenue, net | 0 | 1,836 |
Other, net | (260) | (100) |
Changes in operating assets and liabilities: | ||
Trade and other receivables, net | (2,217) | (7,678) |
Inventories, net | (1,201) | (591) |
Prepaid expenses and other assets | (195) | (230) |
Accounts payable | 2,494 | 182 |
Accrued expenses and other liabilities | (3,472) | (3,963) |
Deferred revenue | 4,874 | 7,602 |
Net cash used for operating activities | 8,816 | (14,482) |
Investing activities: | ||
Capital expenditures | (2) | (104) |
Net cash used for investing activities | (2) | (104) |
Financing activities: | ||
Proceeds from common stock issued under public equity offering, net | 916 | 1,298 |
Repayment of debt principal | (9,086) | 0 |
Premium paid to retire debt | (1,027) | 0 |
Payments for taxes on share-based compensation | (8) | 0 |
Net cash provided by financing activities | (9,205) | 1,298 |
Net (decrease) increase in cash and cash equivalents | (391) | (13,288) |
Cash and cash equivalents at beginning of period | 27,273 | 28,024 |
Cash and cash equivalents at end of period | 26,882 | 14,736 |
Supplemental disclosures of cash flow information: | ||
Cash payments for interest | $ 1,466 | $ 1,609 |
Company Overview and Basis of P
Company Overview and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Company Overview and Basis of Presentation | Company Overview and Basis of Presentation (A) Company Overview Aquestive Therapeutics, Inc. ( together with its subsidiary, “ we ” , “Aquestive” or the “Company”) is a pharmaceutical company advancing medicines to solve patients' problems with current standards of care and provide transformative products to improve their lives. The Company is developing pharmaceutical products that deliver complex molecules through alternative administrations to invasive and inconvenient standard of care therapies. The Company has five licensed commercialized products which are marketed by its licensees in the U.S. and around the world. The Company is the exclusive manufacturer of these licensed products. The Company also collaborates with pharmaceutical companies to bring new molecules to market using proprietary, best-in-class technologies, like PharmFilm ® , and has proven drug development and commercialization capabilities. The Company is advancing a product pipeline for the treatment of severe allergic reactions, including anaphylaxis. The Company has also developed a product pipeline focused on treating diseases of the central nervous system, or CNS. The Company's production facilities are located in Portage, Indiana, and its corporate headquarters and primary research laboratory facilities are based in Warren, New Jersey. (B) Equity Transactions Equity Offering of Common Stock On September 11, 2019, the Company established an “At-The-Market” (ATM) facility pursuant to which the Company may offer up to $25,000 worth of shares of common stock, par value $0.001 per share, of the Company (the "Common Stock"). On November 20, 2020, the Company began utilizing the ATM facility. On March 26, 2021, the Company filed a prospectus supplement to offer up to an additional $50,000 worth of shares of Common Stock under the ATM (the "2021 Prospectus"). The 2019 registration statement covering the shares under the ATM expired under its terms on September 17, 2022. On September 7, 2022, the Company filed a prospectus supplement to register the offer and sale of up to $35,000 worth of shares of Common Stock pursuant to the Amended Equity Distribution Agreement with Piper Sandler Companies (successor to Piper Jaffray & Co.) under a shelf registration statement on Form S-3 (Registration Statement No. 333-254775), or the 2021 Registration Statement, that was declared effective by the Securities and Exchange Commission (SEC) on April 5, 2021. The Company discontinued using the 2021 Prospectus upon the filing of the prospectus supplement on September 7, 2022. For the three months ended March 31, 2023, the Company sold 1,078,622 shares of Common Stock under the ATM which provided net proceeds of approximately $916 after deducting commissions and other transaction costs of $77. This ATM facility has approximately $32,422 worth of shares of Common Stock available at March 31, 2023. For the three months ended March 31, 2022, the Company sold 391,652 shares which provided net proceeds of approximately $1,298 after deducting commissions and other transaction costs of $62. On April 12, 2022, the Company entered into a purchase agreement ("Lincoln Park Purchase Agreement") with Lincoln Park Capital Fund, LLC ("Lincoln Park"), which provides that, upon the terms and subject to the conditions and limitations set forth in the Lincoln Park Purchase Agreement, the Company has the right, but not the obligation, to sell to Lincoln Park up to $40,000 worth of shares of Common Stock from time to time over the 36-month term of the Lincoln Park Purchase Agreement. The Lincoln Park Purchase Agreement contains an ownership limitation such that the Company will not issue, and Lincoln Park will not purchase, shares of Common Stock if it would result in Lincoln Park's beneficial ownership exceeding 9.99% of the Company's then outstanding Common Stock. Lincoln Park has covenanted under the Lincoln Park Purchase Agreement not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the Company's Common Stock. In 2022, the Company sold 1,611,181 shares, including commitment shares, which provided proceeds of approximately $1,987 in connection with the Lincoln Park Purchase Agreement . On April 13, 2022, the Company filed a prospectus supplement in connection with this offering. The Company did not sell shares in connection with the Lincoln Park Purchase Agreement in the first quarter of 2023. On June 6, 2022, the Company entered into securities purchase agreements ("Securities Purchase Agreements") with certain purchasers named therein. The Securities Purchase Agreements provided for the sale and issuance by the Company of an aggregate of: (i) 4,850,000 shares of Common Stock, (ii) pre-funded warrants to purchase up to 4,000,000 shares of Common Stock and (iii) Common Stock warrants to purchase up to 8,850,000 shares of Common Stock. The Company received net proceeds of approximately $7,796, after deducting placement agent fees and expenses and estimated offering expenses payable by the Company. The Company used the net proceeds from the offering for general corporate purposes. On June 8, 2022, the Company filed a prospectus supplement in connection with this equity offering. The pre-funded warrants were fully exercised in 2022 and no Common Stock warrants issued pursuant to the Securities Purchase Agreements were exercised during the three-months ended March 31, 2023. (C) Nasdaq Stock Market Notifications On December 30, 2022, the Company received a notice from the Nasdaq Stock Market (“Nasdaq”) that the Company was not in compliance with Nasdaq’s Listing Rule 5450(a)(1), as the minimum bid price of the Company’s Common Stock had been below $1.00 per share for 30 consecutive business days (the “Minimum Bid Price Requirement”). The notification of noncompliance had no immediate effect on the listing or trading of the Company’s Common Stock on The Nasdaq Global Market. The Company had 180 calendar days, or until June 28, 2023, to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the minimum bid price of the Company’s Common Stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days during this 180-calendar day grace period. On April 13, 2023, the Company received a notice from Nasdaq informing the Company that it had regained compliance with Nasdaq's Listing Rule 5450(a)(1) for continued listing on The Nasdaq Global Market, as the minimum bid price of the Company’s Common Stock had met or exceeded $1.00 per share for a minimum of ten consecutive business days during this 180-day calendar period. See Note 20, Subsequent Events for details. (D) Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements were prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and with Article 10 of Regulation S-X for interim financial reporting. In compliance with those rules, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the fiscal year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2023 (the “2022 Annual Report on Form 10-K”). As included herein, the Condensed Consolidated Balance Sheet as of December 31, 2022 is derived from the audited consolidated financial statements as of that date. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the results of interim periods have been included. The accompanying financial statements reflect certain reclassifications from previously issued financial statements to conform to the current presentation. The Company has evaluated subsequent events for disclosure through the date of issuance of the accompanying unaudited condensed consolidated financial statements. Any reference in these notes to applicable guidance refers to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies (A) Recent Accounting Pronouncements As an emerging growth company, the Company has elected to take advantage of the extended transition period afforded by the Jumpstart Our Business Startups Act for the implementation of new or revised accounting standards and, as a result, the Company will comply with new or revised accounting standards no later than the relevant dates on which adoption of such standards is required for emerging growth companies. The Company believes that the impact of recently issued accounting standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption . Recent Accounting Pronouncements Adopted as of March 31, 2023: In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), amending existing guidance on the accounting for credit losses on financial instruments within its scope. The guidance provides for use of a forward-looking expected loss model for estimating credit losses, replacing the incurred loss model that is based on past events and current conditions. The new guidance also changes the impairment model for available-for-sale debt securities, requiring the use of an allowance to record estimated credit losses (and subsequent recoveries). The Company adopted the new guidance on January 1, 2023. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. The accounting standard update was issued to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The Company adopted the new guidance on January 1, 2023. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. Recent Accounting Pronouncements Not Adopted as of March 31, 2023: In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) : Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This Accounting Standards Update was issued to address the complexity in accounting for certain financial instruments with characteristics of liabilities and equity. Among other provisions, the amendments in this ASU significantly change the guidance on the issuer’s accounting for convertible instruments and the guidance on the derivative scope exception for contracts in an entity’s own equity such that fewer conversion features will require separate recognition, and fewer freestanding instruments, like warrants, will require liability treatment. More specifically, the ASU reduces the number of models that may be used to account for convertible instruments from five to three, amends diluted EPS calculations for convertible instruments, modifies the requirements for a contract that may be settled in an entity’s own shares to be classified in equity and requires expanded disclosures intended to increase transparency. These amendments will be effective for the Company beginning January 1, 2024, with early adoption of the amendments permitted. The Company is currently evaluating the impact from the adoption of ASU 2020-06 on its consolidated financial statements. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820) : Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions . This Accounting Standards Update was issued to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, and to introduce new disclosure requirements for such equity securities. These amendments will be effective for the Company beginning January 1, 2024, with early adoption of the amendments permitted. The Company is currently evaluating the impact from the adoption of ASU 2020-06 on its consolidated financial statements. |
Risks and Uncertainties
Risks and Uncertainties | 3 Months Ended |
Mar. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties | Risks and Uncertainties The Company assesses liquidity in terms of its ability to generate cash to fund its operating, investing and financing activities. The Company’s cash requirements for 2023 and beyond include expenses related to continuing development and clinical evaluation of its products, manufacture and supply costs, costs of regulatory filings, patent prosecution expenses and litigation expenses, expenses related to commercialization of its products, as well as costs to comply with the requirements of being a public company operating in a highly regulated industry. As of March 31, 2023, the Company had $26,882 of cash and cash equivalents. The Company has experienced a history of net losses in prior periods. The Company's accumulated deficits totaled $303,139 as of March 31, 2023. The net losses and accumulated deficits were partially offset by gross margins from license fees, milestone and royalty payments from commercial licensees and co-development parties. The Company's funding requirements have been met by its cash and cash equivalents, as well as its existing equity and debt offerings, including the 12.5% Senior Secured Notes. The Company began utilizing its ATM facility in November 2020. Since inception to March 31, 2023, the Company sold 11,420,579 shares of Common Stock which generated net cash proceeds of approximately $40,656, net of commissions and other transaction costs of $2,130. For the three months ended March 31, 2023, the Company sold 1,078,622 shares of Common Stock which provided net proceeds of approximately $916, net of commissions and other transaction costs of $77. This ATM facility has approximately $32,422 worth of shares of Common Stock available at March 31, 2023. The Company is subject to the SEC general instructions of Form S-3 known as the "baby shelf rules." Under these instructions, the amount of funds the Company can raise through primary public offerings of securities in any 12-month period using its registration statement on Form S-3 is limited to one-third of the aggregate market value of the shares of the Company’s Common Stock held by non-affiliates. Therefore, the Company will be limited in the amount of proceeds it is able to raise by selling shares of its Common Stock using its Form S-3, including under the ATM facility and the Lincoln Park Purchase Agreement, until such time as its public float exceeds $75 million. While the Company’s ability to execute its business objectives and achieve profitability over the longer term cannot be assured, the Company's on-going business, existing cash, expense management activities, including, but not limited to potentially ceasing nearly all R&D activities, as well as access to the equity capital markets, including through its ATM facility and under the Lincoln Park Purchase Agreement, provide near term liquidity for the Company to fund its operating needs, including making the principal and interest payments on the 12.5% Senior Secured Notes, for at least the next twelve months as it continues to execute its business strategy. See Note 13, 12.5% Senior Secured Notes and Loans Payable for details. |
Revenues and Trade Receivables,
Revenues and Trade Receivables, Net | 3 Months Ended |
Mar. 31, 2023 | |
Revenues and Trade Receivables, Net [Abstract] | |
Revenues and Trade Receivables, Net | Revenues and Trade Receivables, Net The Company’s revenues include (i) sales of manufactured products pursuant to contracts with commercialization licensees, (ii) license and royalty revenues, and (iii) co-development and research fees generally in the form of milestone payments. The Company recognizes revenue to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To achieve this core principle, a five-step model is applied that includes (1) identifying the contract with a customer, (2) identifying the performance obligation in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing when, or as, an entity satisfies a performance obligation. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the current revenue recognition standard. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. At contract inception, the Company assesses the goods promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a distinct good. When identifying performance obligations, the Company considers all goods or services promised in a contract regardless of whether explicitly stated in the contract or implied by customary business practice. The Company's performance obligations consist mainly of transferring goods and services identified in the contracts, purchase orders or invoices. Manufacture and supply revenue – this revenue is derived from products manufactured exclusively for specific customers according to their strictly-defined specifications, subject only to specified quality control inspections. Accordingly, at the point in time when quality control requirements are satisfied, revenue net of related discounts is recorded. Proprietary product sales, net - this net revenue is recognized when product is shipped and title passes to the customer, typically at time of delivery. At the time of sale, estimates for various revenue allowances are recorded based on historical trends and judgmental estimates. For sales of Sympazan (prior to its outlicensing by the Company to Otter Pharmaceuticals, LLC in October 2022), returns allowances and prompt pay discounts are estimated based on contract terms and historical return rates, if available, and these estimates are recorded as a reduction of receivables. Similarly determined estimates are recorded relating to wholesaler service fees, co-pay support redemptions, Medicare, Medicaid and other rebates, and these estimates are reflected as a component of accrued liabilities. Once all related variable considerations are resolved and uncertainties as to collectable amounts are eliminated, estimates are adjusted to actual allowance amounts. Provisions for these estimated amounts are reviewed and adjusted on no less than a quarterly basis. License and Royalty Revenu e – license revenues are determined based on an assessment of whether the license is distinct from any other performance obligations that may be included in the underlying licensing arrangement. If the customer is able to benefit from the license without provision of any other performance obligations by the Company and the license is thereby viewed as a distinct or functional license, the Company then determines whether the customer has acquired a right to use the license or a right to access the license. For functional licenses that do not require further development or other ongoing activities by the Company, the customer is viewed as acquiring the right to use the license as, and when, transferred and revenues are generally recorded at a point in time, subject to contingencies or constraints. For symbolic licenses providing substantial value only in conjunction with other performance obligations to be provided by the Company, revenues are generally recorded over the term of the license agreement. Such other obligations provided by the Company generally include manufactured products, additional development services or other deliverables that are contracted to be provided during the license term. Payments received in excess of amounts ratably or otherwise earned are deferred and recognized over the term of the license or as contingencies or other performance obligations are met. Royalty revenue is estimated and recognized when sales under supply agreements with commercial licensees are recorded, absent any contractual constraints or collectability uncertainties. Co-development and Research Fees – co-development and research fees are earned through performance of specific tasks, activities or completion of stages of development defined within a contractual development or feasibility study agreement with a customer. The nature of these performance obligations, broadly referred to as milestones or deliverables, are usually dependent on the scope and structure of the project as contracted, as well as the complexity of the product and the specific regulatory approval path necessary for that product. Accordingly, the duration of the Company’s research and development projects may range from several months to approximately three years. Although each contractual arrangement is unique, common milestones included in these arrangements include those for the performance of efficacy and other tests, reports of findings, formulation of initial prototypes, production of stability clinical and/or scale-up batches, and stability testing of those batches. Additional milestones may be established and linked to clinical results of the product submission and/or approval of the product by the FDA and the commercial launch of the product. Revenue recognition arising from milestone payments is dependent upon the facts and circumstances surrounding the milestone payments. Milestone payments based on a non-sales metric such as a development-based milestone ( e.g ., an NDA filing or obtaining regulatory approval) represent variable consideration and are included in the transaction price subject to any constraints. If the milestone payments relate to future development, the timing of recognition depends upon historical experience and the significance a third party has on the outcome. For milestone payments to be received upon the achievement of a sales threshold, the revenue from the milestone payments is recognized at the later of when the actual sales are incurred or the performance obligation to which the sales relate to has been satisfied. Contract Assets - in certain situations, customer contractual payment terms provide for invoicing in arrears. Accordingly, some, or all performance obligations may be completely satisfied before the customer may be invoiced under such agreements. In these situations, billing occurs after revenue recognition, which results in a contract asset supported by the estimated value of the completed portion of the performance obligation. These contract assets are reflected as a component of other receivables within Trade and other receivables within the Condensed Consolidated Balance Sheet. As of March 31, 2023, and December 31, 2022, such contract assets were $3,507 and $2,139, respectively, consisting primarily of products and services provided under specific contracts to customers for which earnings processes have been met prior to shipment of goods or full delivery of completed services. Contract Liabilities - in certain situations, customer contractual payment terms are structured to permit invoicing in advance of delivery of a good or service. In such instances, the customer’s cash payment may be received before satisfaction of some, or any, performance obligations that are specified. In these situations, billing occurs in advance of revenue recognition, which results in contract liabilities. These contract liabilities are reflected as deferred revenue within the Condensed Consolidated Balance Sheet. As remaining performance obligations are satisfied, an appropriate portion of the deferred revenue balance is credited to earnings. As of March 31, 2023, and December 31, 2022, such contract liabilities were $37,804 and $32,930, respectively. The Company’s revenues were comprised of the following: Three Months Ended 2023 2022 Manufacture and supply revenue $ 9,762 $ 9,171 License and royalty revenue 919 506 Co-development and research fees 453 403 Proprietary product sales, net — 2,190 Total revenues $ 11,134 $ 12,270 Disaggregation of Revenue The following table provides disaggregated net revenue by geographic area: Three Months Ended 2023 2022 United States $ 8,165 $ 11,081 Ex-United States 2,969 1,189 Total revenues $ 11,134 $ 12,270 Ex-United States revenues are derived primarily from Hypera Pharma ("Hypera") and Indivior Inc. ("Indivior") for product manufactured for markets outside of the United States. Trade and other receivables, net consist of the following: March 31, December 31, Trade receivables $ 4,122 $ 3,274 Contract and other receivables 3,507 2,139 Less: allowance for doubtful accounts (40) (40) Less: sales-related allowances (38) (669) Trade and other receivables, net $ 7,551 $ 4,704 The following table presents the changes in the allowance for doubtful accounts: March 31, December 31, Allowance for doubtful accounts at beginning of the period $ 40 $ 40 Additions charged to expense — — Write-downs charged against the allowance — — Allowance for doubtful accounts at end of the period $ 40 $ 40 Sales-Related Allowances and Accruals Revenues from sales of products are recorded net of prompt payment discounts, wholesaler service fees, returns allowances, rebates and co-pay support redemptions. These reserves are based on estimates of the amounts earned or to be claimed on the related sales. These amounts are treated as variable consideration, estimated and recognized as a reduction of the transaction price at the time of the sale. The Company includes these estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized for such transaction will not occur, or when the uncertainty associated with the variable consideration is resolved. The calculation of some of these items requires management to make estimates based on sales data, historical return data, contracts and other related information that may become known in the future. The adequacy of these provisions is reviewed on a quarterly basis. The following table provides a summary of activity with respect to sales-related allowances and accruals for the three months ended March 31, 2023: Total Sales-Related Allowances Balance at December 31, 2022 $ 669 Provision — Payments / credits (49) Reclassifications $ (582) Balance at March 31, 2023 $ 38 Total reductions of gross product sales from sales-related allowances and accruals were $0 for the three months ended March 31, 2023. Accruals for returns allowances and prompt pay discounts are reflected as a direct reduction of trade receivables and accruals for wholesaler service fees, co-pay support redemptions and rebates as current liabilities. The accrued balances relative to these provisions included in Trade and other receivables, net and Accounts payable and accrued expenses were $38 and $793, respectively, as of March 31, 2023 and $669 and $1,012, respectively, as of December 31, 2022. Concentration of Major Customers Customers are considered major customers when net revenue exceeds 10% of total revenue for the period or outstanding receivable balances exceed 10% of total receivables. For the three months ended March 31, 2023, Indivior and Hypera exceeded the 10% threshold for revenue and represented approximately 77% and 14% of total revenue, respectively. As of March 31, 2023, Indivior and Hypera exceeded the 10% threshold for outstanding receivables and represented 68% and 11%, respectively, of outstanding receivables. For the three months ended March 31, 2022, Indivior exceeded the 10% threshold for revenue and represented approximately 78% of total revenue. As of December 31, 2022, Indivior exceeded the 10% threshold for outstanding receivables and represented 80% of total trade and other receivables. |
Material Agreements
Material Agreements | 3 Months Ended |
Mar. 31, 2023 | |
Material Agreements [Abstract] | |
Material Agreements | Material Agreements Commercial Exploitation Agreement with Indivior In August 2008, the Company entered into a Commercial Exploitation Agreement with Reckitt Benckiser Pharmaceuticals, Inc. (with subsequent amendments collectively, the “Indivior License Agreement”). Reckitt Benckiser Pharmaceuticals, Inc. was later succeeded to in interest by Indivior Inc. Pursuant to the Indivior License Agreement, the Company agreed to manufacture and supply Indivior’s requirements for Suboxone ® , a sublingual film formulation, both inside and outside the United States on an exclusive basis. Under the terms of the Indivior License Agreement, the Company is required to manufacture Suboxone in accordance with current Good Manufacturing Practice standards and according to the specifications and processes set forth in the related quality agreements the Company entered into with Indivior. Additionally, the Company is required to obtain Active Pharmaceutical Ingredients ("API") for the manufacture of Suboxone directly from Indivior. The Indivior License Agreement specifies a minimum annual threshold quantity of Suboxone that the Company is obligated to fill and requires Indivior to provide the Company with a forecast of its requirements at various specified times throughout the year. The Indivior License Agreement provides for payment by Indivior of a purchase price per unit that is subject to adjustment based on the Company’s ability to satisfy minimum product thresholds. In addition to the purchase price for the Suboxone supplied, Indivior is required to make certain single digit percentage royalty payments tied to net sales value (as provided for in the Indivior License Agreement) outside of the U.S., subject to annual maximum amounts and limited to the life of the related patents. The Indivior License Agreement contains customary contractual termination provisions, including with respect to a filing for bankruptcy or corporate dissolution, an invalidation of the intellectual property surrounding Suboxone, and commission of a material breach of the Indivior License Agreement by either party. Additionally, Indivior may terminate the Indivior License Agreement if the FDA or other applicable regulatory authority declares the Company’s manufacturing site to no longer be suitable for the manufacture of Suboxone or Suboxone is no longer suitable to be manufactured due to health or safety reasons. The initial term of the Indivior License Agreement was seven years from the commencement date. Thereafter, the Indivior License Agreement automatically renews for successive one-year periods, unless either party provides the other with written notice of its intent not to renew at least one year prior to the expiration of the initial or renewal term. Effective as of March 2, 2023, the Company entered into Amendment No. 11 to the Indivior License Agreement (the “Indivior Amendment”). The Indivior Amendment was entered into for the primary purpose of amending the Agreement as follows: (i) extending the term of the Agreement until August 16, 2026 and thereafter providing for automatic renewal terms of successive one year periods unless Indivior delivers notice to the Company, at least twelve months prior to the expiration of the then current term, of Indivior’s intent not to renew, subject to the earlier termination rights of the parties under the Agreement, and providing that the Agreement will not automatically renew for any renewal term beginning after the expiration of the last to expire of the product patents; and (ii) agreeing to transfer pricing and payment terms for supplied product. Supplemental Agreement with Indivior On September 24, 2017, the Company entered into an agreement with Indivior, or the Indivior Supplemental Agreement. Pursuant to the Indivior Supplemental Agreement, the Company conveyed to Indivior all existing and future rights in the settlement of various ongoing patent enforcement legal actions and disputes related to the Suboxone product. The Company also conveyed to Indivior the right to sublicense manufacturing and marketing capabilities to enable an Indivior licensed generic buprenorphine product to be produced and sold by parties unrelated to Indivior or Aquestive. Under the Indivior Supplemental Agreement, the Company was entitled to receive certain payments from Indivior commencing on the date of the Indivior Supplemental Agreement through January 1, 2023. Once paid, all payments made under the Indivior Supplemental Agreement are non-refundable. Through February 20, 2019, the at-risk launch date of the competing generic products of Dr. Reddy’s Labs and Alvogen, the Company received an aggregate of $40,750 from Indivior under the Indivior Supplemental Agreement. Further payments under the Indivior Supplemental Agreement were suspended until adjudication of related patent infringement litigation is finalized. As a result of the settlement and dismissal of all claims under the lawsuit with Dr. Reddy’s Labs on June 28, 2022, no further payments are due to the Company under the Indivior Supplemental Agreement. See Note 19, Contingencies for details. All payments made by Indivior to the Company pursuant to the Indivior Supplemental Agreement were in addition to, and not in place of, any amounts owed by Indivior to the Company pursuant to the Indivior License Agreement. License Agreement with Sunovion Pharmaceuticals, Inc. On April 1, 2016, the Company entered into a license agreement with Cynapsus Therapeutics Inc. (which was later succeeded to in interest by Sunovion Pharmaceuticals, Inc.), referred to as the Sunovion License Agreement, pursuant to which Sunovion obtained an exclusive, worldwide license (with the right to sub-license) to certain intellectual property, including existing and future patents and patent applications, covering all oral films containing apomorphine for the treatment of off episodes in Parkinson’s disease patients. Sunovion used this intellectual property to develop its apomorphine product KYNMOBI®, which was approved by the FDA on May 21, 2020. This approval triggered Sunovion's obligation to remit a payment of $4,000 due on the earlier of: (a) the first day of product availability at a pharmacy in the United States; or (b) within six months of FDA approval of the product. This amount was received as of September 30, 2020 and was included in License and royalty revenues for the twelve months ended December 31, 2020. Effective March 16, 2020, the Company entered into a first amendment (the "First Amendment") to the Sunovion License Agreement. The Amendment was entered into for the primary purpose of amending the Sunovion License Agreement as follows: (i) including the United Kingdom and any other country currently in the European Union (EU) which later withdraws as a member country in the EU for purpose of determining the satisfaction of the condition triggering the obligation to pay the third milestone due under the Sunovion License Agreement, (ii) extending the date after which Sunovion has the right to terminate the Sunovion License Agreement for convenience from December 31, 2024 to March 31, 2028, (iii) modifying the effective inception date of the first minimum annual royalty due from Sunovion to the Company form January 1, 2020 to April 1, 2020, and (iv) modifying the termination provision to reflect the Company's waiver of the right to terminate the Sunovion License Agreement in the event that KYNMOBI was not commercialized by January 1, 2020. This Sunovion License Agreement will continue until terminated by Sunovion in accordance with the termination provisions of the Amendment to the Sunovion License Agreement. The Sunovion License Agreement continues (on a country-by-country basis) until the expiration of all applicable licensed patents unless earlier terminated under the termination provisions contained therein. Upon termination of the Sunovion License Agreement, all rights to intellectual property granted to Sunovion to develop and commercialize apomorphine-based products will revert to the Company. On October 23, 2020, the Company amended the Sunovion License Agreement to clarify the parties' agreement with respect to certain provisions in the Sunovion License Agreement, specifically the date after which Sunovion has the right to terminate the Sunovion License Agreement and the rights and obligations of the parties regarding the prosecution and maintenance of the Company's patents covered under the Sunovion License Agreement. In consideration of the rights granted to Sunovion under the Sunovion License Agreement, the Company received aggregate payments totaling $22,000 to date. In addition to the upfront payment of $5,000, the Company has also earned an aggregate of $17,000 in connection with specified regulatory and development milestones in the United States and Europe (the “Initial Milestone Payments”), all of which have been received to date. With the Monetization Agreement entered into on November 3, 2020 relating to KYNMOBI as described in the paragraph below, we are no longer entitled to receive any payments under the Sunovion License Agreement. Purchase and Sale Agreement with an affiliate of Marathon Asset Management ("Marathon") On November 3, 2020, we entered into a Purchase and Sale Agreement (the "Monetization Agreement") with MAM Pangolin Royalty, LLC, an affiliate of Marathon Asset Management ("Marathon"). Under the terms of the Monetization Agreement, we sold to Marathon all of our contractual rights to receive royalties and milestone payments due under the Sunovion License Agreement related to Sunovion's apomorphine product, KYNMOBI®, an apomorphine film therapy for the treatment of off episodes in Parkinson’s disease patients, which received approval from the FDA on May 21, 2020. In exchange for the sale of these rights, we received an upfront payment from Marathon of $40,000 and an additional payment of $10,000 through the achievement of the first milestone. We have received an aggregate amount of $50,000 through March 31, 2023 under the Monetization Agreement. Under the Monetization Agreement, additional contingent payments of up to $75,000 may be due to us upon the achievement of worldwide royalty and other commercial targets within a specified timeframe, which could result in total potential proceeds of $125,000. Based on the current public forecast by Sunovion of estimated KYNMOBI sales as of March 31, 2023, the Company likely will not receive any of the additional contingent payments under the Monetization Agreement. See Note 15, Sale of Future Revenue for further details on the accounting for the Monetization Agreement. Agreement to Terminate CLA with Zevra Therapeutics, Inc. (formerly KemPharm, Inc.) In March 2012, the Company entered into an agreement with Zevra Therapeutics, Inc. (formerly KemPharm, Inc.) (“Zevra”), to terminate a Collaboration and License Agreement entered into by the Company and Zevra in April 2011. Under this termination arrangement, the Company has the right to participate in any and all value that Zevra may derive from the commercialization or any other monetization of Zevra's KP-415 and KP-484 compounds or their derivatives. Among these monetization transactions are those related to any business combinations involving Zevra and collaborations, royalty arrangements, or other transactions from which Zevra may realize value from these compounds. Licensing and Supply Agreement with Haisco for Exservan™ (Riluzole Oral Film) for ALS Treatment in China The Company entered into a License, Development and Supply Agreement with Haisco, a Chinese limited company listed on the Shenzhen Stock Exchange, effective as of March 3, 2022 (the "Haisco Agreement"), pursuant to which Aquestive granted Haisco an exclusive license to develop and commercialize Exservan™ (riluzole oral film) for the treatment of amyotrophic lateral sclerosis, or ALS (“Exservan"), in China. Under the terms of the Haisco Agreement, Aquestive will serve as the exclusive sole manufacturer and supplier for Exservan in China. Under the Haisco Agreement, as amended, the Company received a $7,000 upfront cash payment in September 2022, and will receive regulatory milestone payments, receive double-digit royalties on net sales of Exservan in China, and earn manufacturing revenue upon the sale of Exservan in China. Compensatory Arrangements of Certain Officers On May 17, 2022, the Company announced that Keith J. Kendall, former President and Chief Executive Officer of the Company, was leaving the Company and the Company's Board of Directors, effective May 17, 2022. In connection with his departure, Mr. Kendall and the Company entered into a Separation Agreement, including a Consulting Agreement (collectively, the “Separation Agreement”) dated as of May 17, 2022. Pursuant to the Separation Agreement, Mr. Kendall’s employment with the Company ceased effective as of May 17, 2022 (the “Termination Date”). Under the Separation Agreement, Mr. Kendall received the following principal severance benefits, contingent upon Mr. Kendall's compliance with a customary release of claims entered into at the time: (i) a cash payment consisting of the sum of any previously unpaid base salary through the Termination Date and any accrued and unused vacation time for the 2022 calendar year; (ii) a cash payment consisting of his pro-rata portion of his target bonus in the amount of $280; (iii) a cash payment in the amount of $150, representing 90 days of his base pay in lieu of the required notice period under Mr. Kendall’s employment agreement; (iv) severance payments consisting of (a) a cash payment of $263, which represents an acceleration of the first three installments of Mr. Kendall’s 18-month severance he is entitled to under his employment agreement; (b) monthly severance payments of $53 per month for the first through the seventh months following the Termination Date; (c) $70 paid for the eighth month after the Termination Date; and (d) monthly severance payments of $88 for the ninth through eighteenth months following the Termination Date; (v) accelerated vesting of unvested outstanding equity awards, with options remaining exercisable for the duration of the stated term of each award; and (vi) continuing coverage under the Company’s group health and life insurance plans at the same levels and on the same terms and conditions as are provided to similarly-situated executives, for a period of 18 months. Under the terms of the Separation Agreement, Mr. Kendall served as a consultant to the Company, on an as-needed basis providing transition services, strategic planning, financial planning, merger and acquisition advice and consultation, for a period from the Separation Date to December 31, 2022. For these services, Mr. Kendall received a consulting fee of $10 per month. Licensing and Supply Agreement with Atnahs Pharma UK Limited The Company entered into a License and Supply Agreement with Atnahs Pharma UK Limited, a company registered in England and Wales ("Pharmanovia"), effective as of September 26, 2022 (the "Pharmanovia Agreement"), pursuant to which the Company granted Pharmanovia an exclusive license to certain of the Company's intellectual property to develop and commercialize Libervant™ (diazepam) Buccal Film for the treatment of prolonged or acute, convulsive seizures in all ages in certain countries of the European Union, the United Kingdom, Switzerland, Norway and the Middle East and North Africa (the "Territory") during the term of the Pharmanovia Agreement. Under the Pharmanovia Agreement, Pharmanovia will lead the regulatory and commercialization activities for Libervant in the Territory and the Company will serve as the exclusive sole manufacturer and supplier of Libervant in the Territory. Pursuant to the Pharmanovia Agreement, the Company received $3,500 upon agreement execution and, upon the occurrence of certain conditions set forth in the Pharmanovia Agreement, will receive additional milestone payments and profit shares, as well as manufacturing fees and royalty fees through the expiration of the Pharmanovia Agreement. Effective March 27, 2023, the Company amended the Pharmanovia Agreement (the "Pharmanovia Amendment") to expand the scope of territory to cover the rest of the world, excluding US, Canada and China. Under the Pharmanovia Amendment, Pharmanovia will be responsible for seeking appropriate regulatory approval in the expanded territories, which includes Latin America, Africa and Asia Pacific. Pursuant to the terms of the Pharmanovia Amendment, the Company received a non-refundable payment of $2,000 from Pharmanovia in connection with the Pharmanovia Amendment execution. Licensing Agreement with Assertio Holdings, Inc. Effective October 26, 2022, the Company entered into a License Agreement with Otter Pharmaceuticals, LLC, a subsidiary of Assertio, to license Sympazan ® |
Financial Instruments _ Fair Va
Financial Instruments – Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments – Fair Value Measurements | Financial Instruments – Fair Value Measurements Certain assets and liabilities are reported on a recurring basis at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1 — Observable quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable prices that are based on inputs not quoted on active markets but corroborated by market data. • Level 3 — Unobservable inputs that are supported by little or no market activity, such as pricing models, discounted cash flow methodologies and similar techniques. The carrying amounts reported in the balance sheets for trade and other receivables, prepaid and other current assets, accounts payable and accrued expenses, and deferred revenue approximate their fair values based on the short-term maturity of these assets and liabilities. The Company granted warrants to certain noteholders in connection with its debt repayment and debt refinancing during 2020 and 2019, respectively. Those warrants were valued based on Level 3 inputs and their fair value was based primarily on an independent third-party appraisal prepared as of the grant date consistent with generally accepted valuation methods of the Uniform Standards of Professional Appraisal Practice, the American Society of Appraisers and the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held Company Equity Securities Issued as Compensation. See Note 14 , Warrants for further information on these warrants. The Company's 12.5% Senior Secured Notes contain a repurchase offer or put option which gives holders of the option the right, but not the obligation, to require the Company to redeem the Notes up to a capped portion of milestone payments resulting from the Monetization Agreement. This put option was valued based on Level 3 inputs and its fair value was based primarily on an independent third-party appraisal consistent with generally accepted valuation methods of the Uniform Standards of Professional Appraisal Practice, the American Society of Appraisers and the American Institute of Certified Public Accountants Accounting and Valuation Guide. See Note 13, 12.5% Senior Secured Notes and Loans Payable for further discussion. In June 2022, the Company issued pre-funded warrants to purchase up to 4,000,000 shares of Common Stock and Common Stock warrants to purchase up to 8,850,000 shares of Common Stock in connection with its Securities Purchase Agreements with certain purchasers. Those warrants were valued based on Level 3 inputs and their fair value was based primarily on an independent third-party appraisal prepared as of the grant date consistent with generally accepted valuation methods of the Uniform Standards of Professional Appraisal Practice, the American Society of Appraisers and the American Institute of Certified Public Accountants’ Accounting and Valuation Guide. See Note 14, Warrants for further information on these warrants. |
Inventories, Net
Inventories, Net | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Inventories, Net The components of Inventory, net are as follows: March 31, December 31, Raw material $ 1,699 $ 1,899 Packaging material 3,359 2,914 Finished goods 1,923 967 Total inventory, net $ 6,981 $ 5,780 |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Useful March 31, December 31, Machinery 3-15 years $ 19,880 $ 19,810 Furniture and fixtures 3-15 years 769 769 Leasehold improvements (a) 21,386 21,375 Computer, network equipment and software 3-7 years 2,627 2,627 Construction in progress 1,399 1,467 46,061 46,048 Less: accumulated depreciation and amortization (42,247) (41,963) Total property and equipment, net $ 3,814 $ 4,085 (a) Leasehold improvements are amortized over the shorter of the lease term or their estimated useful lives. |
Right-of-Use Assets and Lease O
Right-of-Use Assets and Lease Obligations | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Right-of-Use Assets and Lease Obligations | Right-of-Use Assets and Lease Obligations The Company leases all realty used as its production and warehouse facilities, corporate headquarters, commercialization operations center and research and laboratory facilities. None of these three leases include the characteristics specified in ASC 842, Leases , that require classification as financing leases and, accordingly, these leases are accounted for as operating leases. These leases, as amended, provide remaining terms between 5.0 and 10.5 years, including renewal options expected to be exercised to extend the lease periods. The Company does not recognize a right-to use asset and lease liability for short-term leases, which have terms of 12 months or less on its consolidated balance sheet. For longer-term lease arrangements that are recognized on the Company's consolidated balance sheet, the right-of-use asset and lease liability is initially measured at the commencement date based upon the present value of the lease payments due under the lease. These payments represent the combination of the fixed lease and fixed non-lease components that are due under the arrangement. The costs associated with the Company's short-term leases, as well as variable costs relating to the Company's lease arrangements, are not material to the Company's financial results. The implicit interest rates of the Company's lease arrangements are generally not readily determinable and as such, the Company applies an incremental borrowing rate, which is established based upon the information available at the lease commencement date, to determine the present value of lease payments due under an arrangement. Measurement of the operating lease liability reflects a range of an estimated discount rate of 14.8% to 15.6% applied to minimum lease payments, including expected renewals, based on the incremental borrowing rate experienced in the Company’s collateralized debt refinancing. The Company's lease costs are recorded in manufacture and supply, research and development and selling, general and administrative expenses in its Consolidated Statements of Operations and Comprehensive Income (Loss). For the three-months ended March 31, 2023, total operating lease expenses totaled $418, including variable lease expenses such as common area maintenance and operating costs of $108. For the three-month period ended March 31, 2022, total operating lease expenses totaled $419, including variable lease expenses such as common area maintenance and operating costs of $96, respectively. Maturities of the Company’s operating lease liabilities are as follows: Remainder of 2023 $ 903 2024 1,230 2025 1,266 2026 1,300 2027 and thereafter 6,319 Total future lease payments 11,018 Less: imputed interest (4,984) Total operating lease liabilities $ 6,034 |
Intangible Assets, Net
Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | Intangible Assets, Net The following table provides the components of identifiable intangible assets, all of which are finite lived: March 31, December 31, Purchased intangible $ 3,858 $ 3,858 Purchased patent 509 509 4,367 4,367 Less: accumulated amortization (2,971) (2,932) Intangible assets, net 1,396 1,435 |
Other non-current Assets
Other non-current Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other non-current Assets | Other non-current Assets The following table provides the components of other non-current assets: March 31, December 31, Royalty receivable 5,000 5,000 Other 1,485 1,451 Total other non-current assets $ 6,485 $ 6,451 During the second quarter of 2020, under the Sunovion License Agreement, the Company recognized $8,000 of royalty revenue and corresponding royalty receivable, related to the eight $1,000 annual minimum guaranteed royalty that is due. In connection with the Monetization Agreement, the Company performed an assessment under ASC 860, Transfer and Servicing to determine whether the existing receivable was transferred to Marathon and concluded it was not transferred. Royalty receivable consists of five annual minimum payments due from Sunovion, the last of which is due in March 2028. The current portion of the royalty receivable is included in Trade and other receivables, net. See Note 15, Sale of Future Revenue |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following: March 31, December 31, Accrued compensation $ 2,407 $ 6,389 Real estate and personal property taxes 413 322 Accrued distribution expenses and sales returns provision 793 1,012 Other 895 244 Total accrued expenses $ 4,508 $ 7,967 |
12.5% Senior Secured Notes and
12.5% Senior Secured Notes and Loans Payable | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
12.5% Senior Secured Notes and Loans Payable | 12.5% Senior Secured Notes and Loans Payable On July 15, 2019, the Company completed a private placement of up to $100,000 aggregate principal of its 12.5% Senior Secured Notes due 2025 (the “12.5% Notes”) and issued warrants for 2,000,000 shares of Common Stock (the “Warrants”), at $0.001 par value per share. Upon closing of the indenture for the 12.5% Notes (the "Base Indenture"), the Company issued $70,000 of the 12.5% Notes (the “Initial Notes”) along with the Warrants and rights of first offer (the “First Offer Rights”) to the noteholders participating in this transaction. Issuance of the Initial Notes and Warrants provided net proceeds of $66,082. On November 3, 2020, the Company entered into the First Supplemental Indenture (the "First Supplemental Indenture" and, together with all other subsequent supplemental indentures and the Base Indenture, collectively, the "Indenture") by and among the Company and U.S. Bank National Association, as Trustee (the "Trustee") and Collateral Agent thereunder to the Base Indenture, by and between the Company and the Trustee. Under the Second Supplemental Indenture, the Company repaid $22,500 of its $70,000 outstanding 12.5% Notes from the upfront proceeds received under the Monetization Agreement. Further, the Company entered into an additional Purchase Agreement with its lenders whereby the Company issued in aggregate $4,000 of additional 12.5% Notes (the "Additional Notes") in lieu of paying a prepayment premium to two lenders on the early repayment of the 12.5% Notes discussed above. The result of these two transactions reduced the net balance of the Company's 12.5% Senior Notes outstanding in the aggregate to $51,500 at December 31, 2020. The $4,000 principal issuance would be repaid proportionally over the same maturities as the other 12.5% Notes. The Company also paid one of its lenders a $2,250 premium as result of the early retirement of debt. The Company accounted for the $22,500 debt repayment as a debt modification of the 12.5% Notes. The fees paid to lenders inclusive of (i) $2,250 early premium prepayment and (ii) $4,000 issuance of Additional Notes in lieu of paying a prepayment penalty were recorded as additional debt discount, amortized over the remaining life of the 12.5% Notes using the effective interest method. Loan origination costs of $220 associated with the Additional Notes were expensed as incurred. Existing deferred discounts and loan origination fees on the 12.5% Notes are amortized as an adjustment of interest expense over the remaining term of modified debt using the effective interest method. The First Supplemental Indenture contains a provision whereby, as the Company receives any cash proceeds from the Monetization Agreement, each noteholder has the right to require the Company to redeem all or any part of such noteholder's outstanding 12.5% Notes at a repurchase price in cash equal to 112.5% of the principal amount, plus accrued and unpaid interest. This repurchase offer is capped at 30% of the cash proceeds received by the Company as the contingent milestones are attained, if any, up through June 30, 2025. A valuation study was performed by an independent third party appraiser and updated as of March 31, 2023. Based on the valuation study, the put option was valued at $58 and has been recorded in Other non-current liabilities. The embedded put option is deemed to be a derivative under ASC 815, Derivatives and Hedging , which requires the recording of the embedded put option at fair value and subject to remeasurement at each reporting period. In addition, as of the closing of this transaction, the Company issued to the holders of the 12.5% Notes warrants to purchase 143,000 shares of its Common Stock. On August 6, 2021, pursuant to the Third Supplemental Indenture, the holders of the 12.5% Notes extended to June 30, 2022 from December 31, 2021, the Company's ability to access, at the Company's option, $30,000 of 12.5% Notes re-openers under the Indenture. Under the Third Supplemental Indenture, the first $10,000 of 12.5% Notes re-openers represented a commitment of such amount by current holders of 12.5% Notes, at the option of the Company, contingent upon FDA approval of the Company's product candidate Libervant™ (diazepam) Buccal Film for the management of seizure clusters ("First Additional Securities"). In addition, under the Third Supplemental Indenture, a second $20,000 12.5% Notes re-opener represented a right, at the Company's option, to market to current holders of the Company's 12.5% Notes, and or other noteholders, additional 12.5% Notes up to such amount, contingent upon FDA approval of Libervant for U.S. market access ("Second Additional Securities"). Under the Third Supplemental Indenture, the Company agreed that, if and to the extent that the Company accessed these re-openers, it would grant to the noteholders warrants to purchase up to 714,000 shares of Common Stock, with the strike price calculated based on the 30-day volume weighted average closing price of the Common Stock at the warrant grant date. On October 7, 2021, the Company entered into the Fourth Supplemental Indenture, pursuant to which the amortization schedule for the 12.5% Notes was amended to provide for the date of the first amortization payment to be extended from September 30, 2021 to March 30, 2023. The Fourth Supplemental Indenture did not change the maturity date of the 12.5% Notes or the interest payment obligation due under the 12.5% Notes. In connection with the Fourth Supplemental Indenture, the Company entered into a Consent Fee Letter with the holders of the 12.5% Notes (the “Consent Fee Letter”), pursuant to which the Company agreed to pay the holders of the 12.5% Notes an additional cash payment ("Consent Fee") of $2,700 in the aggregate, payable in four quarterly payments beginning May 15, 2022. Additionally, the Company recognized a loss on the extinguishment of debt of $13,822 for fees and expenses related to the Fourth Supplemental Indenture during the fourth quarter of 2021. As of March 31, 2023, the Company completed its $2,700 Consent Fee payment to the holders of the 12.5% Notes. On May 13, 2022, pursuant to the Fifth Supplemental Indenture, the holders of the 12.5% Notes further extended to March 31, 2023 from June 30, 2022, the Company's ability to access, at the Company's option, $30,000 of 12.5% Notes re-openers under the Indenture, subject to the full approval of Libervant by the FDA for sale in the United States, which full approval included U.S. market access for Libervant. Because full FDA approval was not obtained by March 31, 2023, the Company's option to access the re-openers expired on such date. A debt maturity table is presented below: Remainder of 2023 $ 12,609 2024 19,487 2025 10,317 Total $ 42,413 The 12.5% Notes provide a stated fixed interest rate of 12.5%, payable quarterly in arrears, with the final quarterly principal repayment of 12.5% Notes due at maturity on June 30, 2025. As of March 31, 2023, the Company recorded its principal payments as Loans payable, current and Loans payable, net on its Condensed Consolidated Balance Sheet. The Company may elect, at its option, to redeem the 12.5% Notes at any time at premiums that range from 101.56% of outstanding principal if prepayment occurs on or after the fifth anniversary of the issue date of the Initial Notes to 112.50% if payment occurs during the third year after the issuance of the Notes. The Indenture also includes change of control provisions under which the Company may be required to redeem the 12.5% Notes at 101% of the remaining principal plus accrued interest at the election of the noteholders. During the first quarter of 2023, the Company redeemed $9,086 of its outstanding 12.5% Notes. The Company also paid $353 in prepayment premium as result of the early retirement of debt which was reflected as a loss on extinguishment of debt. The prepayments along with a scheduled principal repayment in the first quarter of 2023 reduced the net balance of the 12.5% Notes outstanding in the aggregate to $42,413. The Company capitalizes legal and other third-party costs incurred in connection with obtaining debt as deferred debt issuance costs and applies the unamortized portion as a reduction of the outstanding face amount of the related loan. Similarly, the Company amortizes debt discounts, such as those represented by warrants issued to its lenders, and offsets those as a direct reduction of its outstanding debt. Amortization expense arising from deferred debt issuance costs and debt discounts related to the 12.5% Notes for the three months ended March 31, 2023 was $4, while comparative amortization expense for the three months ended March 31, 2022 were $4. Unamortized deferred debt issuance costs and deferred debt discounts totaled $22 and $27 as of March 31, 2023 and December 31, 2022, respectively. |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2023 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | Warrants Warrants Issued to 12.5% Senior Secured Noteholders Warrants that were issued in conjunction with the Initial Notes (the “Initial Warrants”) and Additional Notes (the “Additional Warrants”) expire on June 30, 2025 and entitle the noteholders to purchase up to 2,143,000 shares of Common Stock and included specified registration rights. Management estimated the fair value of the Initial Warrants to be $6,800 and the Additional Warrants to be $735, each based on an assessment by an independent third-party appraiser. The fair value of the respective warrants was treated as a debt discount, amortizable over the term of the respective warrants, with the unamortized 12.5% Notes portion applied to reduce the aggregate principal amount of the 12.5% Notes in the Company’s unaudited Condensed Consolidated Balance Sheet. Additionally, since the Initial Warrants and Additional Warrants issued do not provide warrant redemption or put rights within the control of the holders that could require the Company to make a payment of cash or other assets to satisfy the obligations under the warrants, except in the case of a “cash change in control”, the fair value attributed to the warrants is presented in Additional Paid-in Capital in the Company’s unaudited Condensed Consolidated Balance Sheet. There were no warrants exercised as it relates to the Initial Warrants and the Additional Warrants during the three months ended March 31, 2023 or 2022, respectively. Warrants Issued Under Securities Purchase Agreements |
Sale of Future Revenue
Sale of Future Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Sale of Future Revenue | Sale of Future RevenueOn November 3, 2020, the Company entered into the Monetization Agreement with Marathon. Under the terms of the Monetization Agreement, the Company sold all of its contractual rights to receive royalties and milestone payments due under the Sunovion License Agreement related to Sunovion's apomorphine product, KYNMOBI, an apomorphine film therapy for the treatment of off episodes in Parkinson’s disease patients, which received approval from the FDA on May 21, 2020. In exchange for the sale of these rights, the Company received an upfront payment of $40,000 and an additional payment of $10,000 through the achievement of the first milestone. The Company has received an aggregate amount of $50,000 through March 31, 2023 under the Monetization Agreement. Under the Monetization Agreement, additional contingent payments of up to $75,000 may be due to the Company upon the achievement of worldwide royalty and other commercial targets within a specified timeframe, which could result in total potential proceeds of $125,000. The Company recorded the upfront proceeds of $40,000 and subsequent first milestone of $10,000, reduced by $2,909 of transaction costs, as a liability related to the sale of future revenue that will be amortized using the effective interest method over the life of the Monetization Agreement. As future contingent payments are received, they will increase the balance of the liability related to the sale of future revenue. Although the Company sold all of its rights to receive royalties and milestones, as a result of ongoing obligations related to the generation of these royalties, the Company will account for these royalties as revenue. Its ongoing obligations include the maintenance and defense of the intellectual property and to provide assistance to Marathon in executing a new license agreement for KYNMOBI in the event Sunovion terminates the Sunovion License Agreement in one or more jurisdictions of the licensed territory under the Sunovion License Agreement. The accounting liabilities, as adjusted over time, resulting from this transaction and any non-cash interest expenses associated with those liabilities do not and will not represent any obligation to pay or any potential future use of cash. During the second quarter of 2020, under the Sunovion License Agreement, the Company recognized $8,000 of royalty revenue and corresponding royalty receivable, related to the $1,000 annual minimum guaranteed royalty that is due. In connection with the Monetization Agreement, the Company performed an assessment under ASC 860, Transfer and Servicing to determine whether the existing receivable was transferred to Marathon and concluded that the receivable was not transferred. As royalties are remitted to Marathon from Sunovion, the collection of the royalty receivable and balance of the liability related to the sale of future revenue will be effectively repaid over the life of the agreement. In order to determine the amortization of the liability related to the sale of future revenue, the Company is required to estimate the total amount of future royalty and milestone payments to Marathon over the life of the Monetization Agreement and contingent milestone payments from Marathon to the Company. The sum of future royalty payments less the $50,000 in proceeds received and future contingent payments will be recorded as interest expense over the life of the Monetization Agreement. At execution, the estimate of this total interest expense resulted in an effective annual interest rate of approximately 24.9%. This estimate contains significant assumptions that impact both the amount recorded at execution and the interest expense that will be recognized over the life of the Monetization Agreement. The Company will periodically assess the estimated royalty and milestone payments to Marathon from Sunovion and contingent milestone payments from Marathon to the Company. To the extent the amount or timing of such payments is materially different from the original estimates, an adjustment will be recorded prospectively to increase or decrease interest expense. There are a number of factors that could materially affect the amount and timing of royalty and milestone payments to Marathon from Sunovion and, correspondingly, the amount of interest expense recorded by the Company, most of which are not under the Company's control. Such factors include, but are not limited to, changing standards of care, the initiation of competing products, manufacturing or other delays, generic competition, intellectual property matters, adverse events that result in government health authority imposed restrictions on the use of products, significant changes in foreign exchange rates as the royalties remitted to Marathon are made in U.S. dollars (USD) while a portion of the underlying sales of KYNMOBI will be made in currencies other than USD, and other events or circumstances that are not currently foreseen. Changes to any of these factors could result in increases or decreases in both royalty revenue and interest expense related to the sale of future revenue. Based on the current public forecast by Sunovion of estimated KYNMOBI sales as of March 31, 2023, the Company likely will not receive any of the additional contingent payments under the Monetization Agreement. As a result, the Company discontinued recording interest expense related to the sale of future revenue. The following table shows the activity of the liability related to the sale of future revenue for the three months ended March 31, 2023 : Liability related to the sale of future revenue, net at December 31, 2022 $ 65,259 Royalties related to the sale of future revenue (27) Amortization of issuance costs 52 Interest expense related to the sale of future revenue — Liability related to the sale of future revenue, net (includes current portion of $1,147) $ 65,284 |
Net Earnings (Loss) Per Share
Net Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Earnings (Loss) Per Share | Net Earnings (Loss) Per Share Basic net earnings (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares. The following table reconciles the basic to diluted weighted average shares outstanding for the three months ended March 31, 2023. As a result of the Company’s net loss incurred for the three months ended March 31, 2022, all potentially dilutive instruments outstanding would have anti-dilutive effects on per-share calculations. Therefore, basic and diluted net loss per share were the same for the three months ended March 31, 2022 as reflected below. Three Months Ended 2023 2022 Numerator: Net income (loss) $ 8,068 $ (13,220) Denominator: Weighted-average number of common shares – basic 55,631,947 41,465,798 Effect of dilutive stock options and warrants 18,160,939 — Weighted-average number of common shares – diluted 73,792,886 41,465,798 Earnings per share attributable to common stockholders: Earnings (Loss) per common share – basic $ 0.15 $ (0.32) Earnings (Loss) per common share – diluted $ 0.11 $ (0.32) As of March 31, 2023, the Company’s dilutive instruments included 5,774,772 options, 1,821,738 unvested restricted stock units, and 10,564,429 warrants to purchase common shares. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation The Company recognized share-based compensation in its unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) during 2023 and 2022 as follows: Three Months Ended 2023 2022 Manufacture and supply $ 41 $ 48 Research and development 72 169 Selling, general and administrative 231 696 Total share-based compensation expenses $ 344 $ 913 Share-based compensation from: Restricted stock units $ 25 $ — Stock options 319 913 Total share-based compensation expenses $ 344 $ 913 Share-Based Compensation Equity Awards The following tables provide information about the Company’s restricted stock unit and stock option activity during the three-month period ended March 31, 2023: Restricted Stock Unit Awards (RSUs): Number of Weighted (in thousands) Unvested as of December 31, 2022 162 $ 2.38 Granted 1,724 $ 0.81 Vested (26) $ 2.55 Forfeited (39) $ 2.55 Unvested as of March 31, 2023 1,821 $ 0.89 Vested and expected to vest as of March 31, 2023 1,632 $ 0.89 Stock Option Awards: Number of Weighted Average (in thousands) Outstanding as of December 31, 2022 6,028 $ 5.48 Granted — $ — Exercised, Forfeited, Expired (253) $ 2.33 Outstanding as of March 31, 2023 5,775 $ 5.62 Vested and expected to vest as of March 31, 2023 5,666 $ 5.69 Exercisable as of March 31, 2023 4,089 $ 6.92 As of March 31, 2023, $1,413 of unrecognized compensation expense related to unvested restricted stock units is expected to be recognized over a weighted average period of 2.89 years from the date of grant. As of March 31, 2023, $2,672 of unrecognized compensation expense related to non-vested stock options is expected to be recognized over a weighted average period of 1.72 years from the date of grant. 2022 Inducement Equity Incentive Plan |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company has accounted for income taxes under the asset and liability method, which requires deferred tax assets and liabilities to be recognized for the estimated future tax consequences attributable to differences between financial statement carrying amounts and respective tax bases of existing assets and liabilities, as well as net operating loss carryforwards and research and development credits. Valuation allowances are provided if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items. For the three months ended March 31, 2023, the effective income tax rate was 0% and the Company recorded $0 from its pretax gain of $8,068. For the three months ended March 31, 2022, the Company recorded no income tax benefit from its pretax loss of $13,220. The primary factors impacting the effective tax rate for three months ended March 31, 2023, is the anticipated full year pre-tax book loss, the expected utilization of net operating losses and research and development credits to offset any current year tax liabilities, and a full valuation allowance against any associated net deferred tax assets. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Litigation and Contingencies From time to time, the Company has been and may again become involved in legal proceedings arising in the course of its business, including product liability, intellectual property, securities, civil tort, and commercial litigation, and environmental or other regulatory matters. Patent-Related Litigation Indivior Inc., Indivior UK Ltd., and Aquestive Therapeutics, Inc. v. Dr. Reddy’s Labs. S.A. and Dr. Reddy’s Labs., Inc. On February 7, 2018, the Company and Indivior Inc. and Indivior UK Ltd. (collectively, “Indivior”) initiated a lawsuit against Dr. Reddy’s Laboratories S.A. and Dr. Reddy’s Laboratories, Inc. (collectively, “Dr. Reddy’s”) asserting infringement of U.S. Patent No. 9,855,221 (the "221 patent”). On April 3, 2018, the Company and Indivior initiated a separate lawsuit against Dr. Reddy’s asserting infringement of U.S. Patent No. 9,931,305 (the "’305 patent”). On May 29, 2018, the lawsuits regarding the ’221 and ’305 patents were consolidated which was originally initiated by Indivior against Dr. Reddy’s asserting infringement of U.S. Patent No. 9,687,454 (the "’454 patent”). On June 28, 2022, pursuant to a settlement agreement between the parties, the Court entered a Stipulation and Order of Dismissal, dismissing all claims and counterclaims with prejudice in the lawsuit. Indivior Inc., Indivior UK Ltd., and Aquestive Therapeutics, Inc. v. Teva Pharmaceuticals USA, Inc. On February 7, 2018, the Company and Indivior initiated a lawsuit against Teva Pharmaceuticals USA, Inc. (“Teva”) asserting infringement of the ’221 patent. On April 3, 2018, the Company and Indivior initiated a separate lawsuit against Teva asserting infringement of the ’305 patent. On May 29, 2018, the lawsuits regarding the ’221 and ’305 patents were consolidated with a suit originally initiated by Indivior against Teva asserting infringement of the ’454 patent. The parties agreed that the case would be governed by the final judgment against Dr. Reddy’s Laboratories S.A., which was settled pursuant to a settlement agreement whereby the court entered a Stipulation and Order of Dismissal, dismissing all claims and counterclaims with prejudice in the lawsuit on June 28, 2022. Indivior Inc., Indivior UK Ltd., and Aquestive Therapeutics, Inc. v. Alvogen Pine Brook LLC On September 14, 2017, Indivior initiated a lawsuit against Alvogen Pine Brook LLC (“Alvogen”) asserting infringement of the ’454 patent. On February 7, 2018, the Company and Indivior filed an Amended Complaint, adding the Company as a plaintiff and asserting infringement of the’221 patent. On April 3, 2018, the Company and Indivior initiated a separate lawsuit against Alvogen asserting infringement of the ’305 patent. On May 29, 2018, the cases were consolidated. On February 26, 2019, the court granted the parties’ agreed stipulation to drop the ’221 patent from the case. On January 9, 2020, the court entered a stipulated order of non-infringement of the ’305 patent based on the court’s claim construction ruling, and the Company and Indivior preserved the right to appeal the claim construction ruling. On November 21, 2019, Alvogen filed an amended answer and counterclaims asserting monopolization, attempted monopolization, and conspiracy to monopolize against the Company and Indivior under federal and New Jersey antitrust laws. The court denied the Company’s motion to dismiss Alvogen’s counterclaims on August 24, 2020. On November 2, 2020, Alvogen filed a second amended answer and counterclaims, removing its allegations of monopolization and attempted monopolization against the Company and asserting only conspiracy to monopolize against the Company. Fact discovery on Alvogen’s antitrust counterclaims concluded on January 29, 2021. Expert discovery concluded on October 8, 2021, and dispositive motions were filed on October 26, 2021. The court heard oral argument on the dispositive motions on August 29, 2022, and the parties are awaiting a ruling from the court. There is no trial date set. The Company is not able to determine or predict the ultimate outcome of this proceeding or provide a reasonable estimate or range of estimates of the possible outcome or losses, if any, in this matter. Reckitt Benckiser Pharmaceuticals, Inc. and MonoSol Rx, LLC v. BioDelivery Sciences International, Inc. and Quintiles Commercials US, Inc. (BDSI 2014 Lawsuit) On September 22, 2014, the Company and Indivior initiated a lawsuit against BDSI and Quintiles Commercial US, Inc. (“Quintiles”) asserting infringement of U.S. Patent No. 8,765,167 (the "’167 patent”) in the District of New Jersey (Civil Action No. 3:14-cv-5892). On July 22, 2015, the case was transferred to the United States District Court for the Eastern District of North Carolina. BDSI filed requests for inter partes review (“IPR”) of the ’167 patent before the Patent Trial and Appeal Board (“PTAB”), and on May 6, 2016, the Court stayed the case pending the outcome and final determination of the IPR proceedings. On March 24, 2016, the PTAB issued final written decisions finding the ’167 patent was not unpatentable, and the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) remanded those decisions for further proceedings before the PTAB. Following the PTAB’s February 7, 2019 decision on remand denying institution, BDSI appealed that decision to the Federal Circuit. The Federal Circuit granted the Company’s motion to dismiss the appeal, and denied BDSI’s request for rehearing en banc. BDSI filed a petition for writ of certiorari to the Supreme Court of the United States (“Supreme Court”), which the Supreme Court denied on October 5, 2020. On April 15, 2021, the court lifted the stay of the litigation. On March 8, 2023, pursuant to a settlement agreement between the parties, the parties filed a Joint Stipulation of Dismissal, dismissing all claims and counterclaims asserted in the lawsuit. Aquestive Therapeutics, Inc. v. BioDelivery Sciences International, Inc. On November 11, 2019, the Company initiated a lawsuit against BDSI asserting infringement of the ’167 patent in the Eastern District of North Carolina. On April 1, 2020, the Court denied BDSI’s motion to stay and its motion to dismiss the complaint. On April 16, 2020, BDSI filed its Answer and Counterclaims to the complaint, including counterclaims for non-infringement, invalidity, and unenforceability of the ’167 patent. On May 7, 2020, the Company filed a Motion to Dismiss BDSI’s unenforceability counterclaim and a Motion to Strike BDSI’s corresponding affirmative defenses. On May 28, 2020, BDSI amended its counterclaims and filed an Answer and Amended Counterclaims, which included additional allegations in support of BDSI’s unenforceability counterclaim. On June 25, 2020, the Company filed a Motion to Dismiss BDSI’s Amended Counterclaim for unenforceability and a Motion to Strike BDSI’s corresponding affirmative defense of unenforceability, which BDSI opposed. On March 16, 2021, the court issued an order granting-in-part and denying-in-part the Company’s motion to dismiss BDSI’s counterclaims asserting unenforceability of the ’167 patent. On March 8, 2023, pursuant to a settlement agreement between the parties, the parties filed a Joint Stipulation of Dismissal, dismissing all claims and counterclaims asserted in the lawsuit. Antitrust Litigation State of Wisconsin, et al. v. Indivior Inc., Reckitt Benckiser Healthcare (UK) Ltd., Indivior PLC, and MonoSol Rx, LLC On September 22, 2016, forty-one states and the District of Columbia, or the States, brought a lawsuit against Indivior and the Company in the U.S. District Court for the Eastern District of Pennsylvania alleging violations of federal and state antitrust statutes and state unfair trade and consumer protection laws relating to Indivior’s launch of Suboxone Sublingual Film in 2010 and seeking an injunction, civil penalties, and disgorgement. After filing the lawsuit, the case was consolidated for pre-trial purposes with the In re Suboxone (Buprenorphine Hydrochloride and Naloxone) Antitrust Litigation, MDL No. 2445, or the Suboxone MDL, a multidistrict litigation relating to putative class actions on behalf of various private plaintiffs against Indivior relating to its launch of Suboxone Sublingual Film. While the Company was not named as a defendant in the original Suboxone MDL cases, the action brought by the States alleges that the Company participated in an antitrust conspiracy with Indivior in connection with Indivior’s launch of Suboxone Sublingual Film and engaged in related conduct in violation of federal and state antitrust law. On March 8, 2021, Aquestive filed a motion for summary judgment, and briefing on summary judgment motions was completed on May 28, 2021. The hearing on Aquestive’s motion for summary judgment was held on May 18, 2022 and, on October 19, 2022, the Court entered an order dismissing all claims against the Company in the lawsuit. The order dismissing all claims against the Company could be appealed by the plaintiffs in this case. The Company is not able to determine or predict whether the plaintiffs will appeal the order or the ultimate outcome of this proceeding or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter. Humana and Centene Actions Centene Corporation, Wellcare Health Plans, Inc., New York Quality Healthcare Corporation d/b/a Fidelis Care, and Health Net, LLC v. Indivior Inc, Indivior Solutions Inc., Indivior PLC, Reckitt Benckiser Healthcare (UK) Ltd., and Aquestive Therapeutics, Inc. On September 18, 2020, Humana, Inc. (“Humana”), a health insurance payor, filed a lawsuit against the Company and Indivior in the United States District Court for the Eastern District of Pennsylvania alleging facts similar to those at issue in the Antitrust Case and the Suboxone MDL described above, which lawsuit was assigned to the same judge that is presiding over Antitrust Case and Suboxone MDL. Humana’s Complaint alleges five causes of action against the Company, including conspiracy to violate the RICO Act, fraud under state law, unfair and deceptive trade practices under state law, insurance fraud, and unjust enrichment. On September 21, 2020, Centene Corporation (“Centene”) and other related insurance payors filed a similar lawsuit against the Company and Indivior in the United States District Court for the Eastern District of Missouri. The counsel representing Humana is also representing Centene. On September 21, 2020, the Centene action was provisionally transferred to the Eastern District of Pennsylvania by the United States Judicial Panel on Multidistrict Litigation. On January 15, 2021, the Company filed a motion to dismiss the Centene and Humana complaints. The court in the Eastern District of Pennsylvania dismissed all complaints against the defendants in these matters on July 22, 2021. On August 20, 2021, Centene and Humana appealed the decision to the United States Appeals Court for the Third Circuit (“Third Circuit”). Also, on August 20, 2021, Humana filed a complaint against the Company and Indivior in state court in Kentucky, alleging the same causes of action previously filed in the federal case in the Eastern District of Pennsylvania. That state court action remains stayed pending further action from the court following resolution of the federal appeal in the Third Circuit. On December 15, 2022, the Third Circuit issued an opinion and order affirming the district court’s dismissal of the Centene and Humana actions. The Company is not able to determine or predict the ultimate outcome of the Centene and Humana actions or the state court action in Kentucky by Humana, or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in these matters. California Litigation Neurelis, Inc. v. Aquestive Therapeutics, Inc. On December 5, 2019, Neurelis Inc. filed a lawsuit against us in the Superior Court of California, County of San Diego alleging the following three causes of action: (1) Unfair Competition under California Business and Professional Code § 17200 (“UCL”); (2) Defamation; and (3) Malicious Prosecution. Neurelis filed a First Amended Complaint on December 9, 2019, alleging the same three causes of action. The Company filed a Motion to Strike Neurelis’s Complaint under California’s anti-SLAPP (“strategic lawsuit against public participation”) statute on January 31, 2020, which Neurelis opposed. On August 6, 2020, the Court issued an order granting in part and denying in part the Company’s anti-SLAPP motion. The parties cross-appealed the ruling to the California Court of Appeal. The appeals court held oral argument on the appeal on October 14, 2021, and issued its ruling on November 17, 2021. Under the ruling, the court struck the entirety of the malicious prosecution claim and struck portions of the UCL and defamation claims. On April 12, 2022, Neurelis filed a Second Amended Complaint in response to the Court of Appeal's decision. The Second Amended Complaint also added a cause of action for Trade Libel. On May 3, 2022, the Company filed a "demurrer" challenge to the sufficiency of the allegations of the Second Amended Complaint. Oral argument on the Company’s motion for attorney fees related to the anti-SLAPP motion and on the Second Amended Complaint and demurer challenge was held on June 17, 2022. The Court entered an order granting the Company’s motion for attorney fees, awarding $156 and ordering Neurelis to pay the fees within 60 days of June 17, 2022. The Court denied the Company’s demurrer and the parties are proceeding with discovery on the claims in the Second Amended Complaint. No trial date has been set. The Company is not able to determine or predict the ultimate outcome of this proceeding or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter. Federal Securities Class Action Deanna Lewakowski v. Aquestive Therapeutics, Inc., et al. On March 1, 2021, a securities class action lawsuit was filed in the United States District Court for the District of New Jersey alleging that the Company and certain of its officers engaged in violations of the federal securities laws relating to public statements made by the Company regarding the FDA approval of Libervant. Following the court’s appointment of a lead plaintiff, an amended complaint was filed by the plaintiffs on June 25, 2021. Defendants filed a motion to dismiss on August 16, 2021, which became fully briefed as of November 1, 2021. On March 14, 2023, the Court entered an order granting Defendants’ motion to dismiss without prejudice and permitting plaintiffs leave to file a final, Second Amended Complaint by April 14, 2023. On April 7, 2023, the parties filed a Stipulation of Voluntary Dismissal stating that plaintiffs determined not to file an amended complaint and agreed to dismiss the action as to them with prejudice. On April 10, 2023, the Court so-ordered the stipulation and terminated the lawsuit. Shareholder Derivative Litigation Loreen Niewenhuis v. Keith Kendall, et al. On December 15, 2021, a purported Aquestive shareholder instituted a derivative action captioned Loreen Niewenhuis v. Keith Kendall, et al. in the United States District Court for the District of New Jersey, purportedly on behalf of the Company, against certain current and former officers and directors of the Company. The case was designated as related to the pending federal securities class action Deanna Lewakowski v. Aquestive Therapeutics, Inc., referenced above, and accepted by the same judge presiding over the securities class action. The complaint in this matter alleges claims for breach of fiduciary duty and contribution. The factual allegations that form the basis of these claims are similar to the disclosure-related allegations asserted in the class action. On April 4, 2022, the plaintiff filed an amended complaint asserting the same claims against the same defendants. The Company filed a motion to dismiss the amended complaint on April 25, 2022, which became fully briefed as of June 27, 2022. On April 20, 2023, the parties filed a Stipulation of Voluntary Dismissal stating that plaintiff agreed to dismiss the action as to her with prejudice. On April 21, 2023, the Court so-ordered the stipulation and terminated the lawsuit. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Positive Decision in Litigation Matters On April 10, 2023, the presiding judge in the federal securities class action, Neurelis, Inc. v. Aquestive Therapeutics, Inc., filed in the United States Court for the District of New Jersey, ordered the dismissal of the class action with prejudice pursuant to a Stipulation of Voluntary Dismissal filed by the parties in that action. On April 21, 2023, the same presiding judge ordered the dismissal with prejudice of a related shareholder derivative lawsuit, Loreen Niewenhuis v. Keith Kendall, et al , pursuant to a Stipulation of Voluntary Dismissal filed by the parties in that action. Refer to Note 19, Contingencies for details. Nasdaq's Listing Rule 5450(a)(1) Compliance On April 13, 2023, the Company received a notice from Nasdaq” informing the Company that it has regained compliance with Nasdaq's Listing Rule 5450(a)(1) for continued listing on The Nasdaq Global Market, as the minimum bid price of the Company’s Common Stock had met or exceeded $1.00 per share for a minimum of ten consecutive business days during the applicable 180-day review period. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements were prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and with Article 10 of Regulation S-X for interim financial reporting. In compliance with those rules, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the fiscal year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2023 (the “2022 Annual Report on Form 10-K”). As included herein, the Condensed Consolidated Balance Sheet as of December 31, 2022 is derived from the audited consolidated financial statements as of that date. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the results of interim periods have been included. The accompanying financial statements reflect certain reclassifications from previously issued financial statements to conform to the current presentation. The Company has evaluated subsequent events for disclosure through the date of issuance of the accompanying unaudited condensed consolidated financial statements. Any reference in these notes to applicable guidance refers to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). |
Recent Accounting Pronouncements | Recent Accounting Pronouncements As an emerging growth company, the Company has elected to take advantage of the extended transition period afforded by the Jumpstart Our Business Startups Act for the implementation of new or revised accounting standards and, as a result, the Company will comply with new or revised accounting standards no later than the relevant dates on which adoption of such standards is required for emerging growth companies. The Company believes that the impact of recently issued accounting standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption . Recent Accounting Pronouncements Adopted as of March 31, 2023: In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), amending existing guidance on the accounting for credit losses on financial instruments within its scope. The guidance provides for use of a forward-looking expected loss model for estimating credit losses, replacing the incurred loss model that is based on past events and current conditions. The new guidance also changes the impairment model for available-for-sale debt securities, requiring the use of an allowance to record estimated credit losses (and subsequent recoveries). The Company adopted the new guidance on January 1, 2023. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. The accounting standard update was issued to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The Company adopted the new guidance on January 1, 2023. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. Recent Accounting Pronouncements Not Adopted as of March 31, 2023: In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) : Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This Accounting Standards Update was issued to address the complexity in accounting for certain financial instruments with characteristics of liabilities and equity. Among other provisions, the amendments in this ASU significantly change the guidance on the issuer’s accounting for convertible instruments and the guidance on the derivative scope exception for contracts in an entity’s own equity such that fewer conversion features will require separate recognition, and fewer freestanding instruments, like warrants, will require liability treatment. More specifically, the ASU reduces the number of models that may be used to account for convertible instruments from five to three, amends diluted EPS calculations for convertible instruments, modifies the requirements for a contract that may be settled in an entity’s own shares to be classified in equity and requires expanded disclosures intended to increase transparency. These amendments will be effective for the Company beginning January 1, 2024, with early adoption of the amendments permitted. The Company is currently evaluating the impact from the adoption of ASU 2020-06 on its consolidated financial statements. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820) : Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions . This Accounting Standards Update was issued to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, and to introduce new disclosure requirements for such equity securities. These amendments will be effective for the Company beginning January 1, 2024, with early adoption of the amendments permitted. The Company is currently evaluating the impact from the adoption of ASU 2020-06 on its consolidated financial statements. |
Revenue Recognition and Performance Obligations | The Company’s revenues include (i) sales of manufactured products pursuant to contracts with commercialization licensees, (ii) license and royalty revenues, and (iii) co-development and research fees generally in the form of milestone payments. The Company recognizes revenue to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To achieve this core principle, a five-step model is applied that includes (1) identifying the contract with a customer, (2) identifying the performance obligation in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing when, or as, an entity satisfies a performance obligation. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the current revenue recognition standard. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. At contract inception, the Company assesses the goods promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a distinct good. When identifying performance obligations, the Company considers all goods or services promised in a contract regardless of whether explicitly stated in the contract or implied by customary business practice. The Company's performance obligations consist mainly of transferring goods and services identified in the contracts, purchase orders or invoices. Manufacture and supply revenue – this revenue is derived from products manufactured exclusively for specific customers according to their strictly-defined specifications, subject only to specified quality control inspections. Accordingly, at the point in time when quality control requirements are satisfied, revenue net of related discounts is recorded. Proprietary product sales, net - this net revenue is recognized when product is shipped and title passes to the customer, typically at time of delivery. At the time of sale, estimates for various revenue allowances are recorded based on historical trends and judgmental estimates. For sales of Sympazan (prior to its outlicensing by the Company to Otter Pharmaceuticals, LLC in October 2022), returns allowances and prompt pay discounts are estimated based on contract terms and historical return rates, if available, and these estimates are recorded as a reduction of receivables. Similarly determined estimates are recorded relating to wholesaler service fees, co-pay support redemptions, Medicare, Medicaid and other rebates, and these estimates are reflected as a component of accrued liabilities. Once all related variable considerations are resolved and uncertainties as to collectable amounts are eliminated, estimates are adjusted to actual allowance amounts. Provisions for these estimated amounts are reviewed and adjusted on no less than a quarterly basis. License and Royalty Revenu e – license revenues are determined based on an assessment of whether the license is distinct from any other performance obligations that may be included in the underlying licensing arrangement. If the customer is able to benefit from the license without provision of any other performance obligations by the Company and the license is thereby viewed as a distinct or functional license, the Company then determines whether the customer has acquired a right to use the license or a right to access the license. For functional licenses that do not require further development or other ongoing activities by the Company, the customer is viewed as acquiring the right to use the license as, and when, transferred and revenues are generally recorded at a point in time, subject to contingencies or constraints. For symbolic licenses providing substantial value only in conjunction with other performance obligations to be provided by the Company, revenues are generally recorded over the term of the license agreement. Such other obligations provided by the Company generally include manufactured products, additional development services or other deliverables that are contracted to be provided during the license term. Payments received in excess of amounts ratably or otherwise earned are deferred and recognized over the term of the license or as contingencies or other performance obligations are met. Royalty revenue is estimated and recognized when sales under supply agreements with commercial licensees are recorded, absent any contractual constraints or collectability uncertainties. Co-development and Research Fees – co-development and research fees are earned through performance of specific tasks, activities or completion of stages of development defined within a contractual development or feasibility study agreement with a customer. The nature of these performance obligations, broadly referred to as milestones or deliverables, are usually dependent on the scope and structure of the project as contracted, as well as the complexity of the product and the specific regulatory approval path necessary for that product. Accordingly, the duration of the Company’s research and development projects may range from several months to approximately three years. Although each contractual arrangement is unique, common milestones included in these arrangements include those for the performance of efficacy and other tests, reports of findings, formulation of initial prototypes, production of stability clinical and/or scale-up batches, and stability testing of those batches. Additional milestones may be established and linked to clinical results of the product submission and/or approval of the product by the FDA and the commercial launch of the product. Revenue recognition arising from milestone payments is dependent upon the facts and circumstances surrounding the milestone payments. Milestone payments based on a non-sales metric such as a development-based milestone ( e.g ., an NDA filing or obtaining regulatory approval) represent variable consideration and are included in the transaction price subject to any constraints. If the milestone payments relate to future development, the timing of recognition depends upon historical experience and the significance a third party has on the outcome. For milestone payments to be received upon the achievement of a sales threshold, the revenue from the milestone payments is recognized at the later of when the actual sales are incurred or the performance obligation to which the sales relate to has been satisfied. Contract Assets - in certain situations, customer contractual payment terms provide for invoicing in arrears. Accordingly, some, or all performance obligations may be completely satisfied before the customer may be invoiced under such agreements. In these situations, billing occurs after revenue recognition, which results in a contract asset supported by the estimated value of the completed portion of the performance obligation. These contract assets are reflected as a component of other receivables within Trade and other receivables within the Condensed Consolidated Balance Sheet. As of March 31, 2023, and December 31, 2022, such contract assets were $3,507 and $2,139, respectively, consisting primarily of products and services provided under specific contracts to customers for which earnings processes have been met prior to shipment of goods or full delivery of completed services. Contract Liabilities - in certain situations, customer contractual payment terms are structured to permit invoicing in advance of delivery of a good or service. In such instances, the customer’s cash payment may be received before satisfaction of some, or any, performance obligations that are specified. In these situations, billing occurs in advance of revenue recognition, which results in contract liabilities. These contract liabilities are reflected as deferred revenue within the Condensed Consolidated Balance Sheet. As remaining performance obligations are satisfied, an appropriate portion of the deferred revenue balance is credited to earnings. As of March 31, 2023, and December 31, 2022, such contract liabilities were $37,804 and $32,930, respectively. |
Revenues and Trade Receivable_2
Revenues and Trade Receivables, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenues and Trade Receivables, Net [Abstract] | |
Revenue | The Company’s revenues were comprised of the following: Three Months Ended 2023 2022 Manufacture and supply revenue $ 9,762 $ 9,171 License and royalty revenue 919 506 Co-development and research fees 453 403 Proprietary product sales, net — 2,190 Total revenues $ 11,134 $ 12,270 |
Disaggregation of Revenue | The following table provides disaggregated net revenue by geographic area: Three Months Ended 2023 2022 United States $ 8,165 $ 11,081 Ex-United States 2,969 1,189 Total revenues $ 11,134 $ 12,270 |
Trade and Other Receivables, Net | Trade and other receivables, net consist of the following: March 31, December 31, Trade receivables $ 4,122 $ 3,274 Contract and other receivables 3,507 2,139 Less: allowance for doubtful accounts (40) (40) Less: sales-related allowances (38) (669) Trade and other receivables, net $ 7,551 $ 4,704 |
Changes in Allowance for Bad Debt | The following table presents the changes in the allowance for doubtful accounts: March 31, December 31, Allowance for doubtful accounts at beginning of the period $ 40 $ 40 Additions charged to expense — — Write-downs charged against the allowance — — Allowance for doubtful accounts at end of the period $ 40 $ 40 |
Sales Related Allowances and Accruals | The following table provides a summary of activity with respect to sales-related allowances and accruals for the three months ended March 31, 2023: Total Sales-Related Allowances Balance at December 31, 2022 $ 669 Provision — Payments / credits (49) Reclassifications $ (582) Balance at March 31, 2023 $ 38 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventory, Net | The components of Inventory, net are as follows: March 31, December 31, Raw material $ 1,699 $ 1,899 Packaging material 3,359 2,914 Finished goods 1,923 967 Total inventory, net $ 6,981 $ 5,780 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Useful March 31, December 31, Machinery 3-15 years $ 19,880 $ 19,810 Furniture and fixtures 3-15 years 769 769 Leasehold improvements (a) 21,386 21,375 Computer, network equipment and software 3-7 years 2,627 2,627 Construction in progress 1,399 1,467 46,061 46,048 Less: accumulated depreciation and amortization (42,247) (41,963) Total property and equipment, net $ 3,814 $ 4,085 (a) Leasehold improvements are amortized over the shorter of the lease term or their estimated useful lives. |
Right-of-Use Assets and Lease_2
Right-of-Use Assets and Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Operating Lease Liabilities | Maturities of the Company’s operating lease liabilities are as follows: Remainder of 2023 $ 903 2024 1,230 2025 1,266 2026 1,300 2027 and thereafter 6,319 Total future lease payments 11,018 Less: imputed interest (4,984) Total operating lease liabilities $ 6,034 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Components of Identifiable Intangible Assets | The following table provides the components of identifiable intangible assets, all of which are finite lived: March 31, December 31, Purchased intangible $ 3,858 $ 3,858 Purchased patent 509 509 4,367 4,367 Less: accumulated amortization (2,971) (2,932) Intangible assets, net 1,396 1,435 |
Other non-current Assets (Table
Other non-current Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Other Non-current Assets | The following table provides the components of other non-current assets: March 31, December 31, Royalty receivable 5,000 5,000 Other 1,485 1,451 Total other non-current assets $ 6,485 $ 6,451 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued expenses consisted of the following: March 31, December 31, Accrued compensation $ 2,407 $ 6,389 Real estate and personal property taxes 413 322 Accrued distribution expenses and sales returns provision 793 1,012 Other 895 244 Total accrued expenses $ 4,508 $ 7,967 |
12.5% Senior Secured Notes an_2
12.5% Senior Secured Notes and Loans Payable (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt Maturity | A debt maturity table is presented below: Remainder of 2023 $ 12,609 2024 19,487 2025 10,317 Total $ 42,413 |
Sale of Future Revenue (Tables)
Sale of Future Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Royalty Obligation Activity | The following table shows the activity of the liability related to the sale of future revenue for the three months ended March 31, 2023 : Liability related to the sale of future revenue, net at December 31, 2022 $ 65,259 Royalties related to the sale of future revenue (27) Amortization of issuance costs 52 Interest expense related to the sale of future revenue — Liability related to the sale of future revenue, net (includes current portion of $1,147) $ 65,284 |
Net Earnings (Loss) Per Share (
Net Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Loss Per Share | The following table reconciles the basic to diluted weighted average shares outstanding for the three months ended March 31, 2023. As a result of the Company’s net loss incurred for the three months ended March 31, 2022, all potentially dilutive instruments outstanding would have anti-dilutive effects on per-share calculations. Therefore, basic and diluted net loss per share were the same for the three months ended March 31, 2022 as reflected below. Three Months Ended 2023 2022 Numerator: Net income (loss) $ 8,068 $ (13,220) Denominator: Weighted-average number of common shares – basic 55,631,947 41,465,798 Effect of dilutive stock options and warrants 18,160,939 — Weighted-average number of common shares – diluted 73,792,886 41,465,798 Earnings per share attributable to common stockholders: Earnings (Loss) per common share – basic $ 0.15 $ (0.32) Earnings (Loss) per common share – diluted $ 0.11 $ (0.32) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Compensation Expense | The Company recognized share-based compensation in its unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) during 2023 and 2022 as follows: Three Months Ended 2023 2022 Manufacture and supply $ 41 $ 48 Research and development 72 169 Selling, general and administrative 231 696 Total share-based compensation expenses $ 344 $ 913 Share-based compensation from: Restricted stock units $ 25 $ — Stock options 319 913 Total share-based compensation expenses $ 344 $ 913 |
Restricted Stock Units Awards | The following tables provide information about the Company’s restricted stock unit and stock option activity during the three-month period ended March 31, 2023: Restricted Stock Unit Awards (RSUs): Number of Weighted (in thousands) Unvested as of December 31, 2022 162 $ 2.38 Granted 1,724 $ 0.81 Vested (26) $ 2.55 Forfeited (39) $ 2.55 Unvested as of March 31, 2023 1,821 $ 0.89 Vested and expected to vest as of March 31, 2023 1,632 $ 0.89 |
Stock Option Activity | Stock Option Awards: Number of Weighted Average (in thousands) Outstanding as of December 31, 2022 6,028 $ 5.48 Granted — $ — Exercised, Forfeited, Expired (253) $ 2.33 Outstanding as of March 31, 2023 5,775 $ 5.62 Vested and expected to vest as of March 31, 2023 5,666 $ 5.69 Exercisable as of March 31, 2023 4,089 $ 6.92 |
Company Overview and Basis of_2
Company Overview and Basis of Presentation (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 22 Months Ended | ||||||
Sep. 07, 2022 | Jun. 06, 2022 | Mar. 26, 2021 | Sep. 11, 2019 | Jun. 30, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Sep. 30, 2022 | Apr. 12, 2022 | |
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||||||
Common stock, shares outstanding (in shares) | 55,922,361 | 54,827,734 | ||||||||
Common Stock Warrants | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Warrants issued to purchase common stock (in shares) | 0 | |||||||||
Equity distribution agreement | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Sale of stock, aggregate offering price | $ 25,000,000 | |||||||||
Common stock, par value (in dollars per share) | $ 0.001 | |||||||||
Number of shares issued in transaction (in shares) | 1,078,622 | 391,652 | ||||||||
Consideration received on sale of stock | $ 916,000 | $ 1,298,000 | ||||||||
Equity distribution agreement | Maximum | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Sale of stock, aggregate offering price | $ 35,000,000 | |||||||||
At-the-market offering, amendment no. 1 | Maximum | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Sale of stock, aggregate offering price | $ 50,000,000 | |||||||||
At-the-market offering | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Number of shares issued in transaction (in shares) | 1,078,622 | 11,420,579 | ||||||||
Consideration received on sale of stock | $ 916,000 | $ 40,656,000 | ||||||||
Payments for stock issuance costs | 77,000 | $ 62,000 | $ 2,130,000 | |||||||
Remaining amount available for offering | $ 32,422,000 | |||||||||
Lincoln Park agreement | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Number of shares issued in transaction (in shares) | 0 | 1,611,181 | ||||||||
Consideration received on sale of stock | $ 1,987,000 | |||||||||
Right to sell common stock, value | $ 40,000,000 | |||||||||
Agreement term | 36 months | |||||||||
Securities purchase agreement | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Common stock, shares outstanding (in shares) | 4,850,000 | |||||||||
Shares of common stock | 4,000,000 | 4,000,000 | ||||||||
Shares of common stock in connection with securities purchase agreements | 8,850,000 | 8,850,000 | ||||||||
Net proceeds | $ 7,796,000 |
Risks and Uncertainties (Detail
Risks and Uncertainties (Details) - USD ($) $ in Thousands | 3 Months Ended | 22 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Jul. 15, 2019 | |
Concentration Risk [Line Items] | |||||
Cash and cash equivalents | $ 26,882 | $ 27,273 | |||
Accumulated deficit | $ 303,139 | $ 311,207 | |||
At-the-market offering | |||||
Concentration Risk [Line Items] | |||||
Number of shares issued in transaction (in shares) | 1,078,622 | 11,420,579 | |||
Consideration received on sale of stock | $ 916 | $ 40,656 | |||
Payments for stock issuance costs | 77 | $ 62 | $ 2,130 | ||
Remaining amount available for offering | $ 32,422 | ||||
Senior secured notes due 2025 | |||||
Concentration Risk [Line Items] | |||||
Interest rate | 12.50% | ||||
Senior secured notes due 2025 | Senior notes | |||||
Concentration Risk [Line Items] | |||||
Interest rate | 12.50% |
Revenues and Trade Receivable_3
Revenues and Trade Receivables, Net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Concentration Risk [Line Items] | |||
Contract and other receivables | $ 3,507 | $ 2,139 | |
Contract liabilities | 37,804 | 32,930 | |
Provision | 0 | ||
Accrued balances - trade and other receivables, net | 38 | 669 | |
Accrued balances - accounts payable and accrued expense | $ 793 | $ 1,012 | |
Maximum | |||
Concentration Risk [Line Items] | |||
Research and development, project duration | 3 years | ||
Receivables | Indivior | Customer concentration risk | |||
Concentration Risk [Line Items] | |||
Concentrations of risk | 68% | 80% | |
Receivables | Hypera | Customer concentration risk | |||
Concentration Risk [Line Items] | |||
Concentrations of risk | 11% | ||
Revenue from Contract with Customer Benchmark | Indivior | Customer concentration risk | |||
Concentration Risk [Line Items] | |||
Concentrations of risk | 77% | 78% | |
Revenue from Contract with Customer Benchmark | Hypera | Customer concentration risk | |||
Concentration Risk [Line Items] | |||
Concentrations of risk | 14% |
Revenues and Trade Receivable_4
Revenues and Trade Receivables, Net - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 11,134 | $ 12,270 |
Manufacture and supply revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 9,762 | 9,171 |
License and royalty revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 919 | 506 |
Co-development and research fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 453 | 403 |
Proprietary product sales, net | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 0 | $ 2,190 |
Revenues and Trade Receivable_5
Revenues and Trade Receivables, Net - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Geographic Areas, Revenues from External Customers [Abstract] | ||
Revenues | $ 11,134 | $ 12,270 |
United States | ||
Geographic Areas, Revenues from External Customers [Abstract] | ||
Revenues | 8,165 | 11,081 |
Ex-United States | ||
Geographic Areas, Revenues from External Customers [Abstract] | ||
Revenues | $ 2,969 | $ 1,189 |
Revenues and Trade Receivable_6
Revenues and Trade Receivables, Net - Trade and Other Receivables, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Revenues and Trade Receivables, Net [Abstract] | |||
Trade receivables | $ 4,122 | $ 3,274 | |
Contract and other receivables | 3,507 | 2,139 | |
Less: allowance for doubtful accounts | (40) | (40) | $ (40) |
Less: sales-related allowances | (38) | (669) | |
Trade and other receivables, net | $ 7,551 | $ 4,704 |
Revenues and Trade Receivable_7
Revenues and Trade Receivables, Net - Changes in Allowance for Bad Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for doubtful accounts at beginning of the period | $ 40 | $ 40 |
Additions charged to expense | 0 | 0 |
Write-downs charged against the allowance | 0 | 0 |
Allowance for doubtful accounts at end of the period | $ 40 | $ 40 |
Revenues and Trade Receivable_8
Revenues and Trade Receivables, Net - Summary of Activity with Sales Related Allowances and Accruals (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Accounts Receivable Allowances and Accruals [Roll Forward] | |
Balance at December 31. 2022 | $ 669 |
Provision | 0 |
Payments / credits | 49 |
Reclassifications | (582) |
Balance at March 31, 2023 | $ 38 |
Material Agreements (Details)
Material Agreements (Details) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | 17 Months Ended | 29 Months Ended | ||||||||||
Mar. 27, 2023 USD ($) | Mar. 02, 2023 | Nov. 01, 2022 USD ($) | Oct. 26, 2022 USD ($) | Sep. 26, 2022 USD ($) | May 17, 2022 USD ($) vestingPeriod day | Nov. 03, 2020 USD ($) | Apr. 01, 2016 USD ($) | Nov. 30, 2020 USD ($) | Dec. 31, 2020 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2020 USD ($) | Feb. 20, 2019 USD ($) | Mar. 31, 2023 USD ($) | Mar. 03, 2022 USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Revenues | $ 11,134 | $ 12,270 | ||||||||||||||
Pro rata portion of target bonus | $ 280 | |||||||||||||||
Cash payment representing 90 days of base pay | $ 150 | |||||||||||||||
Days of base pay | day | 90 | |||||||||||||||
Number of installments | vestingPeriod | 3 | |||||||||||||||
Severance costs | $ 263 | |||||||||||||||
Severance period | 18 months | |||||||||||||||
Coverage duration | 18 months | |||||||||||||||
Consulting fee | $ 10 | |||||||||||||||
Assertio Holdings, Inc | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Proceeds from collaborators | $ 9,000 | |||||||||||||||
Contingent consideration, milestone payments | $ 6,000 | |||||||||||||||
First 7 Months | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Severance costs | 53 | |||||||||||||||
Eighth Month | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Severance costs | 70 | |||||||||||||||
Ninth through Eighteenth Month | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Severance costs | $ 88 | |||||||||||||||
License and royalty revenue | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Revenues | $ 919 | $ 506 | ||||||||||||||
Commercial exploitation agreement with Indivior | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
License agreement term | 7 years | |||||||||||||||
Automatic renewal period of agreement | 1 year | 1 year | ||||||||||||||
Commercial exploitation agreement with Indivior | Minimum | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Notice period of intent not to renew agreement | 1 year | |||||||||||||||
Supplemental agreement with Indivior | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Aggregate payment | $ 40,750 | |||||||||||||||
License agreement with Sunovion Pharmaceuticals, Inc. | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Aggregate payment | $ 22,000 | |||||||||||||||
License agreement with Sunovion Pharmaceuticals, Inc. upfront | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Aggregate payment | 5,000 | |||||||||||||||
License agreement with Sunovion Pharmaceuticals, Inc milestones | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Aggregate payment | $ 17,000 | |||||||||||||||
License agreement with Sunovion Pharmaceuticals, Inc milestones | License and royalty revenue | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Revenues | $ 4,000 | |||||||||||||||
MAM Pangolin Royalty , LLC | Monetization Agreement | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Proceeds from sale of future revenue | $ 40,000 | $ 10,000 | $ 50,000 | |||||||||||||
Proceeds from debt, contingent on additional milestones | 75,000 | $ 75,000 | ||||||||||||||
MAM Pangolin Royalty , LLC | Maximum | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Proceeds from sale of future revenue | $ 125,000 | |||||||||||||||
Haisco Pharmaceutical Group Co., Ltd, upfront payment | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Receivable | $ 7,000 | |||||||||||||||
Atnahs Pharma UK Limited | License & Supply Agreement | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Proceeds from sale of future revenue | $ 3,500 | |||||||||||||||
Atnahs Pharma UK Limited, Amended Agreement | License & Supply Agreement | ||||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||||
Proceeds from sale of future revenue | $ 2,000 |
Financial Instruments _ Fair _2
Financial Instruments – Fair Value Measurements (Details) - shares | 1 Months Ended | ||
Jun. 06, 2022 | Jun. 30, 2022 | Jul. 15, 2019 | |
Securities purchase agreement | |||
Warrants [Abstract] | |||
Shares of common stock | 4,000,000 | 4,000,000 | |
Shares of common stock in connection with securities purchase agreements | 8,850,000 | 8,850,000 | |
Senior secured notes due 2025 | |||
Warrants [Abstract] | |||
Interest rate | 12.50% |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 1,699 | $ 1,899 |
Packaging material | 3,359 | 2,914 |
Finished goods | 1,923 | 967 |
Total inventory, net | $ 6,981 | $ 5,780 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 46,061 | $ 46,048 |
Less: accumulated depreciation and amortization | (42,247) | (41,963) |
Total property and equipment, net | 3,814 | 4,085 |
Machinery | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 19,880 | 19,810 |
Machinery | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 3 years | |
Machinery | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 15 years | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 769 | 769 |
Furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 3 years | |
Furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 15 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 21,386 | 21,375 |
Computer, network equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,627 | 2,627 |
Computer, network equipment and software | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 3 years | |
Computer, network equipment and software | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 7 years | |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,399 | $ 1,467 |
Property and Equipment, Net - N
Property and Equipment, Net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 286 | $ 714 |
Right-of-Use Assets and Lease_3
Right-of-Use Assets and Lease Obligations - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 USD ($) lease | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Number of leases | lease | 3 | ||
Right-of-use assets | $ 5,884 | $ 5,211 | |
Operating lease expense | 418 | $ 419 | |
Variable lease expense | $ 108 | $ 96 | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 5 years | ||
Estimated discount rate | 14.80% | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 10 years 6 months | ||
Estimated discount rate | 15.60% |
Right-of-Use Assets and Lease_4
Right-of-Use Assets and Lease Obligations - Maturities (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Leases [Abstract] | |
Remainder of 2023 | $ 903 |
2024 | 1,230 |
2025 | 1,266 |
2026 | 1,300 |
2027 and thereafter | 6,319 |
Total future lease payments | 11,018 |
Less: imputed interest | (4,984) |
Total operating lease liabilities | $ 6,034 |
Intangible Assets, Net - Compon
Intangible Assets, Net - Components of Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | $ 4,367 | $ 4,367 |
Less: accumulated amortization | (2,971) | (2,932) |
Intangible assets, net | 1,396 | 1,435 |
Purchased intangible | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | 3,858 | 3,858 |
Purchased patent | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | $ 509 | $ 509 |
Intangible Assets, Net - Narrat
Intangible Assets, Net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 39 | $ 13 |
Purchased patent | ||
Finite-Lived Intangible Assets [Line Items] | ||
Expected amortization | 117 | |
Expected amortization in 2023 | $ 156 |
Other non-current Assets - Summ
Other non-current Assets - Summary of Other Non-current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Royalty receivable | $ 5,000 | $ 5,000 |
Other | 1,485 | 1,451 |
Total other non-current assets | $ 6,485 | $ 6,451 |
Other non-current Assets - Narr
Other non-current Assets - Narrative (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 USD ($) payment Payment | Mar. 31, 2022 USD ($) | Dec. 31, 2020 USD ($) | Jun. 30, 2020 USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Revenues | $ 11,134 | $ 12,270 | ||
Number of guaranteed royalty payments | payment | 8 | |||
License agreement with Sunovion Pharmaceuticals, Inc. | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Minimum annual royalty receivable | $ 1,000 | $ 1,000 | ||
Number of annual royalty payments receivable | Payment | 5 | |||
Royalty | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Revenues | $ (27) | |||
Royalty | License agreement with Sunovion Pharmaceuticals, Inc. | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Revenues | $ 8,000 | $ 8,000 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 2,407 | $ 6,389 |
Real estate and personal property taxes | 413 | 322 |
Accrued distribution expenses and sales returns provision | 793 | 1,012 |
Other | 895 | 244 |
Total accrued expenses | $ 4,508 | $ 7,967 |
12.5% Senior Secured Notes an_3
12.5% Senior Secured Notes and Loans Payable - 12.5% Senior Secured Notes (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||||
Oct. 07, 2021 | Nov. 03, 2020 | Jul. 15, 2019 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2020 | |
12.5% Senior Secured Notes [Abstract] | |||||||
Warrants issued (in shares) | 2,000,000 | ||||||
Warrant exercise price (in dollars per share) | $ 0.001 | ||||||
Net proceeds from issuance of initial notes, warrants and first offer rights | $ 66,082 | ||||||
Repayment of debt | $ 9,086 | $ 0 | |||||
Long-term debt | 42,413 | ||||||
Premium on early retirement of debt | $ 2,250 | 2,250 | |||||
Loss on extinguishment of debt | (353) | 0 | |||||
Premium paid to retire debt | 1,027 | 0 | |||||
Amortization expense, deferred debt issuance costs and debt discounts | $ 56 | 40 | |||||
Senior notes | |||||||
12.5% Senior Secured Notes [Abstract] | |||||||
Proceeds from refinancing of debt | 4,000 | ||||||
Payments of loan costs | $ 220 | ||||||
Maximum | MAM Pangolin Royalty , LLC | |||||||
12.5% Senior Secured Notes [Abstract] | |||||||
Percentage of cash proceeds | 30% | ||||||
Senior secured notes due 2025 | |||||||
12.5% Senior Secured Notes [Abstract] | |||||||
Interest rate | 12.50% | ||||||
Principal amount | $ 70,000 | ||||||
Warrants issued (in shares) | 714,000 | ||||||
Warrants issued to purchase common stock (in shares) | 143,000 | ||||||
Additional borrowing capacity | $ 30,000 | ||||||
Redemption percentage of debt under change of control provisions | 101% | ||||||
Amortization expense, deferred debt issuance costs and debt discounts | $ 4 | $ 4 | |||||
Unamortized deferred debt issuance cost and deferred debt discounts | 22 | $ 27 | |||||
Senior secured notes due 2025 | Put option | |||||||
12.5% Senior Secured Notes [Abstract] | |||||||
Fair value of put option | 58 | ||||||
Senior secured notes due 2025 | Senior notes | |||||||
12.5% Senior Secured Notes [Abstract] | |||||||
Interest rate | 12.50% | ||||||
Repayment of debt | $ 22,500 | $ 9,086 | |||||
Long-term debt | $ 70,000 | $ 51,500 | |||||
Repurchase price percentage | 112.50% | ||||||
Loss on extinguishment of debt | $ 13,822 | ||||||
Premium paid to retire debt | $ 2,700 | $ 353 | |||||
Senior secured notes due 2025 | Minimum | |||||||
12.5% Senior Secured Notes [Abstract] | |||||||
Elective redemption percentage of debt | 101.56% | ||||||
Senior secured notes due 2025 | Maximum | |||||||
12.5% Senior Secured Notes [Abstract] | |||||||
Principal amount | $ 100,000 | ||||||
Elective redemption percentage of debt | 112.50% | ||||||
Senior secured notes due 2025 - first additional offering | |||||||
12.5% Senior Secured Notes [Abstract] | |||||||
Additional borrowing capacity | $ 10,000 | ||||||
Senior secured notes due 2025 - first additional offering | Maximum | |||||||
12.5% Senior Secured Notes [Abstract] | |||||||
Warrants issued (in shares) | 2,143,000 | ||||||
Senior secured notes due 2025 - second additional offering | |||||||
12.5% Senior Secured Notes [Abstract] | |||||||
Additional borrowing capacity | $ 20,000 |
12.5% Senior Secured Notes an_4
12.5% Senior Secured Notes and Loans Payable - Debt Maturities (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
Remainder of 2023 | $ 12,609 |
2024 | 19,487 |
2025 | 10,317 |
Total | $ 42,413 |
Warrants (Details)
Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2023 | Mar. 31, 2022 | Jun. 30, 2022 | Nov. 03, 2020 | Jul. 15, 2019 | |
Class of Warrant or Right [Line Items] | |||||
Warrants issued (in shares) | 2,000,000 | ||||
Warrant exercise price (in dollars per share) | $ 0.001 | ||||
Exercise of warrants (in shares) | 0 | 0 | |||
Common Stock Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Warrants issued (in shares) | 8,850,000 | ||||
Pre-Funded Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Warrants issued (in shares) | 4,000,000 | ||||
Minimum | Common Stock Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Warrant exercise price (in dollars per share) | $ 0.96 | ||||
Maximum | Common Stock Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Warrant exercise price (in dollars per share) | $ 1.09 | ||||
Senior secured notes due 2025 - first additional offering | |||||
Class of Warrant or Right [Line Items] | |||||
Fair value of warrants | $ 6,800 | ||||
Change in fair value of warrant | $ 735 | ||||
Senior secured notes due 2025 - first additional offering | Maximum | |||||
Class of Warrant or Right [Line Items] | |||||
Warrants issued (in shares) | 2,143,000 | ||||
Senior secured notes due 2025 | |||||
Class of Warrant or Right [Line Items] | |||||
Warrants issued (in shares) | 714,000 | ||||
Interest rate | 12.50% |
Sale of Future Revenue - Narrat
Sale of Future Revenue - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 29 Months Ended | ||||
Nov. 03, 2020 | Nov. 30, 2020 | Dec. 31, 2020 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||||||||
Payments for loan acquisition costs | $ 2,909 | |||||||
Revenues | 11,134 | $ 12,270 | ||||||
Royalty | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Revenues | (27) | |||||||
MAM Pangolin Royalty , LLC | Maximum | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Proceeds from sale of future revenue | $ 125,000 | |||||||
License agreement with Sunovion Pharmaceuticals, Inc. | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Minimum annual royalty receivable | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 | ||||
License agreement with Sunovion Pharmaceuticals, Inc. | Royalty | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Revenues | $ 8,000 | $ 8,000 | ||||||
Monetization Agreement | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Effective annual interest rate | 24.90% | |||||||
Monetization Agreement | MAM Pangolin Royalty , LLC | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Proceeds from sale of future revenue | $ 40,000 | $ 10,000 | $ 50,000 | |||||
Proceeds from debt, contingent on additional milestones | $ 75,000 | $ 75,000 |
Sale of Future Revenue - Royalt
Sale of Future Revenue - Royalty Obligation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Sale of Future Revenue [Roll Forward] | ||
Liability related to the sale of future revenue, net at December 31, 2022 | $ 65,259 | |
Royalties related to the sale of future revenue | 11,134 | $ 12,270 |
Amortization of issuance costs | 52 | |
Interest expense related to the sale of future revenue | 0 | $ 1,836 |
Liability related to the sale of future revenue, net (includes current portion of $1,147) | 65,284 | |
Current portion | 1,147 | |
Royalty | ||
Sale of Future Revenue [Roll Forward] | ||
Royalties related to the sale of future revenue | $ (27) |
Net Earnings (Loss) Per Share -
Net Earnings (Loss) Per Share - Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net income (loss) | $ 8,068 | $ (13,220) |
Weighted-average number of common shares – basic (in shares) | 55,631,947 | 41,465,798 |
Effect of dilutive stock options and warrants (in shares) | 18,160,939 | 0 |
Weighted-average number of common shares - diluted (in shares) | 73,792,886 | 41,465,798 |
Earnings (Loss) per common share – basic (in dollars per share) | $ 0.15 | $ (0.32) |
Earnings (Loss) per common share – diluted (in dollars per share) | $ 0.11 | $ (0.32) |
Net Earnings (Loss) Per Share_2
Net Earnings (Loss) Per Share - Narrative (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 5,774,772 | 5,259,847 |
Unvested restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 1,821,738 | 166,700 |
Warrants on common shares outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 10,564,429 | 1,714,429 |
Share-Based Compensation - Expe
Share-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation expenses [Abstract] | ||
Share-based compensation expenses | $ 344 | $ 913 |
Restricted stock units | ||
Share-based Compensation expenses [Abstract] | ||
Share-based compensation expenses | 25 | 0 |
Stock options | ||
Share-based Compensation expenses [Abstract] | ||
Share-based compensation expenses | 319 | 913 |
Manufacture and supply | ||
Share-based Compensation expenses [Abstract] | ||
Share-based compensation expenses | 41 | 48 |
Research and development | ||
Share-based Compensation expenses [Abstract] | ||
Share-based compensation expenses | 72 | 169 |
Selling, general and administrative | ||
Share-based Compensation expenses [Abstract] | ||
Share-based compensation expenses | $ 231 | $ 696 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Unit Awards (Details) - Restricted stock units shares in Thousands | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Number of Units | |
Unvested, at beginning of period (in shares) | shares | 162 |
Granted (in shares) | shares | 1,724 |
Vested (in shares) | shares | (26) |
Forfeited (in shares) | shares | (39) |
Unvested, at end of period (in shares) | shares | 1,821 |
Vested and expected to vest at end of period (in shares) | shares | 1,632 |
Weighted Average Grant Date Fair Value | |
Unvested, at beginning of period (in dollars per share) | $ / shares | $ 2.38 |
Granted (in dollars per share) | $ / shares | 0.81 |
Vested (in dollars per share) | $ / shares | 2.55 |
Forfeited (in dollars per share) | $ / shares | 2.55 |
Unvested, at end of period (in dollars per share) | $ / shares | 0.89 |
Vested and expected to vest at end of period (in dollars per share) | $ / shares | $ 0.89 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option Activity (Details) - Stock options - $ / shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Number of Options | ||
Outstanding (in shares) | 5,775 | 6,028 |
Granted (in shares) | 0 | |
Exercised, forfeited, expired (in shares) | (253) | |
Vested or expected to vest at end of period (in shares) | 5,666 | |
Exercisable at end of period (in shares) | 4,089 | |
Weighted Average Exercise Price | ||
Outstanding (in dollars per share) | $ 5.62 | $ 5.48 |
Granted (in dollars per share) | 0 | |
Exercised, forfeited, expired (in dollars per share) | 2.33 | |
Vested or expected to vest at end of period (in dollars per share) | 5.69 | |
Exercisable at end of period (in dollars per share) | $ 6.92 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended |
Sep. 30, 2022 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Inducement equity, common stock options award (in shares) | 100,000 | |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation expense related to non-vested stock options | $ 1,413 | |
Unrecognized compensation cost, recognition period | 2 years 10 months 20 days | |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation expense related to non-vested stock options | $ 2,672 | |
Unrecognized compensation cost, recognition period | 1 year 8 months 19 days |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 0% | |
Income taxes | $ 0 | $ 0 |
Net loss | $ (8,068,000) | $ 13,220,000 |
Contingencies (Details)
Contingencies (Details) $ in Thousands | May 03, 2022 USD ($) | Dec. 05, 2019 cause | Sep. 22, 2016 state |
Loss Contingencies [Line Items] | |||
Number of states that brought a lawsuit | state | 41 | ||
Neurelis, Inc. v. Aquestive Therapeutics, Inc. | |||
Loss Contingencies [Line Items] | |||
Litigation settlement, amount awarded from other party | $ | $ 156 | ||
Number of cases pending | cause | 3 |
Uncategorized Items - aqst-2023
Label | Element | Value |
Public equity [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ 5,874,000 |